Is PPO Insurance Worth the Cost?
Weigh the costs and benefits of PPO health insurance
Weigh the costs and benefits of PPO health insurance
Key Takeaways
- PPO plans offer more flexibility in choosing doctors and specialists.
- PPO premiums are often higher than HMO premiums.
- Compare costs, provider networks and benefits before choosing a plan.
If you’re comparing health insurance plans, you may be wondering whether a preferred provider organization (PPO) plan is worth the higher cost.
PPO plans generally offer more flexibility when choosing doctors and specialists. They may also cover some out-of-network care, usually at a higher cost and typically don’t require referrals for specialty care.
Whether a PPO is worth it depends on your healthcare needs, budget and how much choice you want. For some people, having more freedom to choose providers may be worth the added cost. Others may prefer a plan with lower costs and a more defined provider network.
“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, corporate senior vice president and chief medical and operations officer for ambulatory care at Scripps Health.
What is a PPO health insurance plan?
A PPO is a type of health insurance plan with a network of preferred doctors, hospitals and other healthcare providers.
You’ll usually pay less when you stay in the PPO network, but you may also have the option to get care outside the network at a higher cost.
PPO networks, out-of-network benefits and costs vary, so check the plan's details before enrolling.
What are the advantages of a PPO?
More choice in doctors
PPO plans generally have networks of participating doctors, hospitals and specialists. You may also be able to get care outside the network, though you’ll usually pay more.
Fewer referral requirements
Most PPO plans let you see a specialist without first getting a referral from a primary care physician.
This may make things simpler if you regularly see specialists, such as a cardiologist, dermatologist or orthopedic specialist.
More options when you’re away from home
PPO plans may offer more options if you travel often or have a dependent who lives or attends school in another area.
Not every PPO has a nationwide network, so check whether the plan has participating providers where you’re likely to need care.
What are the disadvantages of a PPO?
The extra flexibility can cost more. PPO plans often have higher monthly premiums than health maintenance organization (HMO) plans. Deductibles, copays, coinsurance and other out-of-pocket costs vary by plan, so it's important to compare the full cost of coverage.
Out-of-network care can cost even more. You may have a higher deductible or pay more in coinsurance, and your plan may cover only part of the provider's charges.
PPO vs. HMO: What’s the difference?
PPO and HMO plans both use provider networks, but they differ in cost and flexibility.
PPO plans generally offer more choice in doctors and hospitals, some coverage for out-of-network care and access to specialists without referrals in most cases.
HMO plans usually have lower monthly premiums and require you to get most of your care within the plan’s network. You typically choose a primary care doctor who helps coordinate your care, and referrals may be required for many specialists. Out-of-network care is generally not covered except in emergencies.
You generally do not need a primary care referral to see an in-network OB-GYN for covered obstetrical or gynecological care, even with an HMO.
Because plans vary, check the provider network, referral rules and benefits before enrolling.
Is a PPO worth the higher cost?
A PPO may be worth considering if flexibility and access to more providers are important to you.
You may prefer a PPO if you:
- See several specialists
- Want to keep a doctor who isn’t in an HMO network
- Want the option to get care outside the network
- Travel frequently or spend time away from home
- Have a dependent who lives or attends school elsewhere
- Prefer not to get referrals for specialty care
An HMO may be a better fit if lower monthly premiums are a priority and you're comfortable receiving most of your care within one network.
What does a PPO cost?
When comparing PPO health insurance plans, look beyond the monthly premiums.
Premium
Your premium is the amount you pay for your health insurance, usually each month. PPO premiums are often higher than HMO premiums.
Deductible
A deductible is the amount you pay for covered healthcare services before your plan begins paying its share for many services.
Copays and coinsurance
A copay is a fixed amount you may pay for a medical service or prescription. Coinsurance is the percentage of a covered service you pay after meeting your deductible.
Out-of-pocket maximum
The out-of-pocket maximum is the most you generally pay in a plan year for covered, in-network services before your health plan pays 100% of covered benefits. Premiums and costs for services that are not covered by the plan do not count toward the limit, and out-of-network costs may be treated differently.
Questions to ask before choosing a PPO
Before choosing a PPO plan, consider:
- Are your preferred doctors and hospitals in the network?
- Can you see the specialists you need?
- How much are the premium, deductible, copays and coinsurance?
- How does the plan cover out-of-network care?
- Do you need access to providers outside your home area?
- Are your prescriptions covered?
Comparing these details can help you understand the plan's total costs and whether it meets your needs.
Review your options during open enrollment
Open enrollment is a good time to review your health insurance and compare plans for the coming year.
- Employer-sponsored enrollment dates vary, so check with your employer or human resources department.
- Medicare open enrollment runs from Oct. 15 through Dec. 7 each year.
- Covered California open enrollment generally runs from Nov. 1 through Jan. 31.
Outside open enrollment, you may still be able to change plans after certain life events, such as getting married, having a baby or losing other health coverage.
Choosing a health plan that includes Scripps
Scripps accepts many 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.
Before enrolling, check whether your preferred Scripps physicians, hospitals and services are included in the specific plan's network. Networks can vary even between plans offered by the same insurance company.
Scripps offers primary care, specialty care, urgent care, hospital services and virtual care throughout San Diego County.