Is PPO Insurance Worth the Cost?

A PPO health plan gives you a wide choice of doctors, hospitals and specialists.

In a PPO plan, you have a network of “preferred” providers. These include doctors and specialists who can offer care at the lowest out-of-pocket cost, compared to out-of-network providers.

With a PPO, you’re still covered – though at a higher cost – if you choose to see a provider outside the plan’s network.

You also don’t need a referral to see a specialist. This can be helpful if you want to get a second opinion or skip the step of going through a primary care doctor first.

“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.

For some people, the choice to see any doctor or specialist, even out of network, is worth the extra cost. For others, a more affordable plan like a Health Maintenance Organization (HMO) might be a better option.

HMO plans typically have lower premiums than PPO plans. However, they have stricter rules about which doctors you can see.

HMO plans limit your coverage to providers in their network. If you go to a provider outside the network, you will likely have to pay the full cost of your visit. However, HMO plans often cover emergency and urgent care services, even outside the network. 

HMO plans require you to choose a primary care physician.(PCP) from their network. Women typically can choose their gynecologist as their primary care physician and see them without a referral.

With an HMO, your primary care physician is often the first person you will see any time you need care. If you need to see a specialist like a cardiologist or orthopedic surgeon, you must request a referral from your primary care physician. If the referral is denied, you’ll have to pay out of-pocket for the visit and any follow-up care.

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. Just remember, you have more limited options of which providers you can see.

Be aware that neither a PPO nor an HMO health plan covers you outside the U.S.

It’s important to weigh the value of the flexibility PPOs offer against the higher cost when deciding if a PPO plan or an HMO plan is right for you.

A PPO plan may be worth the cost if you or a dependent want to see out-of-network providers. For example, if you have a dependent who attends school out of state, a PPO plan may make sense, since the broader nationwide provider network can help ensure they remain covered while away from home.

Evaluate PPO plan costs by considering your health needs, budget, premiums, deductibles and out-of-pocket expenses.

The deductible is the amount you pay before your plan starts covering expenses. Higher deductibles usually result in lower monthly premiums, but this means more out-of-pocket costs initially.

Out-of-pocket expenses include co-pays and co-insurance for medical visits. These costs can add up based on your health care use. Knowing about these expenses is important for managing your budget and avoiding financial surprises.

Open enrollment is the one time each year you can review your health insurance and switch plans. This is especially important if you’re deciding between a PPO and an HMO, since both have different costs and levels of flexibility.

If you miss the deadline, you’ll have to wait until the next enrollment period the following year unless you qualify for a special enrollment due to a major life event like marriage, birth of a child, or losing coverage due to job loss.

These are the main open enrollment windows:

• Employer-sponsored insurance: Dates vary but typically start in the fall; check with your HR department
• Medicare annual enrollment: October 15 to December 7
• Covered California Open Enrollment: November 1 to January 31

Take this time to compare PPO vs. HMO options, weigh costs against flexibility and pick the plan that best fits your health and budget.

Ask yourself these questions before you decide:

• Do I want the freedom to see any doctor or specialist without a referral?
• How important is lower monthly cost compared to greater flexibility?
• Do I travel often or live in more than one location during the year?
• Am I comfortable sticking with in-network providers only?
• Do I need coverage for a doctor or specialist I already see who might be out of network?
• Do I have a dependent attending school out of state who may need nationwide coverage?

Scripps accepts most health insurance plans, including PPO and HMO plans.

“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.

Scripps physicians and facilities are located throughout San Diego County — including primary care physicians, pediatricians and more than 100 medical and surgical specialties. In addition, walk-in care, urgent care and four Scripps hospitals on five campuses and various telemedicine options are available.