Is PPO Insurance Worth the Cost?

Both PPO and HMO plans have provider networks that include certain doctors and hospitals. However, HMO plans limit your coverage to providers within their network; if you see a provider outside of the network, you’ll likely have to pay the entire cost yourself. With PPO insurance, you have a wider network of providers, and you can choose to see a doctor who is not in the network.

You’ll typically pay less to see in-network providers, but the plan will pay part of the cost even if you go outside of the network. This can be especially important if you prefer specific doctors or hospitals.

HMO plans require you to choose a primary care physician (PCP) from their network. Your PCP is often the first person you will see any time you need care; if you need to see a specialist such as a cardiologist or orthopedic surgeon, you must request a referral from your PCP, and the HMO usually must approve it before your specialist visit will be covered.

If the referral is denied, you’ll have to pay out of-pocket for the visit and subsequent care by that physician. (With an HMO plan, women usually can choose their gynecologist as their primary care physician and see them without a referral.)

PPO plans do not require you to choose a PCP or obtain approval to see a specialist — you can make the appointment without that referral.

“PPO plans allow more choice. It gives patients the power to either change doctors or seek second opinions anytime without approval, which allows you more flexibility,” says Anil N. Keswani, MD, Scripps Health Chief Medical and Operations Officer, Ambulatory Care.

Because HMO plans limit coverage to your local region, you won’t be covered if you receive care outside of that region (although emergency and urgent care is usually covered). Many PPO plans offer coverage nationwide, offering more flexibility if you travel frequently or live in different locations throughout the year. Be aware that neither type of insurance covers you outside of the country.

Is PPO insurance always better than HMO insurance? It depends on what is important to you. Some attributes of PPO insurances include:

Health care insurance premiums are the basic costs you’ll pay each month for coverage. The more people you cover with your plan, such as your spouse or children, the higher your monthly premium will be. HMO plans generally have lower premiums than PPO plans.

If you rarely seek medical care beyond your annual checkup and you have a strong relationship with your primary care doctor in the network, an HMO may save you money. However, you have more limited options of which providers you can see.

Out-of-pocket costs are expenses you pay in addition to premiums, such as copayments and deductibles. PPO plans typically have higher out-of-pocket costs and may have higher deductibles.

“Scripps and many other health care systems have providers who accept both HMO and PPO plans, so whether or not a PPO health plan is worth the extra cost ultimately depends on your preferences, your health care needs and your budget,” says Dr. Keswani.