PPO Insurance: What Is It?

There are multiple health insurance plans available, which differ by network size, covered services, flexibility, out-of-pocket costs and price.

Preferred provider organization (PPO) plans are the most common type of health plan in the employer-sponsored market, but make up a small percentage of Affordable Care Act (ACA) plans: Roughly 46% of Americans with a workplace health plan are enrolled in a PPO plan, according to the Kaiser Family Foundation. But only 19% of ACA plans are PPOs, according to a Forbes Advisor analysis of ACA plans.

Featured Health Insurance Partners

1

Aetna

Coverage area

Offers plans in all 50 states and Washington, D.C.

Number of providers in network

About 1.2 million

Physician copays start at

$20

1

Aetna

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On Healthcare Marketplace's Website

2

Blue Cross Blue Shield

Coverage area:

Offers plans in all 50 states and Washington, D.C.

Number of providers in network

About 1.7 million

Physician copays start at

$10

2

Blue Cross Blue Shield

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On Healthcare Marketplace's Website

3

Cigna

Coverage area

Offers plans in all 50 states and Washington, D.C.

Number of providers in network

About 1.5 million

Physician copays start at

$0

3

Cigna

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On Healthcare Marketplace's Website

What Is a PPO Health Insurance Plan?

A PPO is a type of health insurance plan known for its flexibility. Insurance companies contract medical care providers and health care facilities to create networks. If you receive care from a doctor in the PPO’s network, the insurance company provides the highest level of coverage, and you pay the lowest out-of-pocket cost.

PPO plans allow you to get medical care from a provider outside the network, but the services are covered at a much smaller percentage.

In addition, a PPO doesn’t usually require you to get a referral from your primary care doctor to see a specialist, like an orthopedic surgeon or dermatologist.

How Does a PPO Health Plan Work?

When you visit a doctor in the PPO’s network, your health insurance company covers a percentage of the cost once you reach your deductible. You pay the rest. This is called cost-sharing.

Health care providers and facilities in the PPO’s network agree to get paid a certain amount for various services, typically at a discounted rate.

For example, let’s say you injure your wrist and need an X-ray, which will cost $300. In this example, the cost of an X-ray at an in-network facility has a $60 copay, whereas your cost at an out-of-network provider on the plan has a 35% coinsurance. In this case, the cost of an X-ray at an in-network facility would only be $60, compared to a $105 charge you would face for going out-of-network.

With a PPO, your health insurance company tries to incentivize you for getting care in-network because it costs you less out-of-pocket. However, you still have the flexibility of managing your own care, without the need for specialist referrals from a primary care provider.

While you can go to specialists without getting pre-authorization, PPO plans often require preauthorization for certain procedures, medications or types of care. Unless it’s an emergency, you may need approval from the insurance company before moving forward with a specific treatment plan such as a surgery. This prevents your insurance company from covering potentially unnecessary expensive treatments.

How Much Does a PPO Health Insurance Plan Cost?

The average monthly cost for a PPO plan for a 30-year-old is $458. See below for averages for other ages, couples and families.

PPO health plan costs

Health insurance plan member	Average monthly cost for a PPO plan
Child age 0-14	$306
Child age 18	$362
Adult Individual age 21	$404
Adult Individual age 27	$423
Adult Individual age 30	$458
Adult Individual age 40	$516
Adult Individual age 50	$721
Adult Individual age 60	$1,095
Couple age 21	$807
Couple age 30	$916
Couple age 40	$1,032
Couple age 50	$1,442
Couple age 60	$2,191
Couple+1 child, age 21	$1,113
Couple+1 child, age 30	$1,222
Couple+1 child, age 40	$1,337
Couple+1 child, age 50	$1,748
Couple+2 children, age 21	$1,419
Couple+2 children, age 30	$1,528
Couple+2 children, age 40	$1,643
Couple+2 children, age 50	$2,053
Couple+3 or more Children, age 21	$1,725
Couple+3 or more Children, age 30	$1,833
Couple+3 or more Children, age 40	$1,949
Couple+3 or more Children, age 50	$2,359
Individual+1 child, age 21	$709
Individual+1 child, age 30	$764
Individual+1 child, age 40	$822
Individual+1 child, age 50	$1,027
Individual+2 children, age 21	$1,015
Individual+2 children, age 30	$1,070
Individual+2 children, age 40	$1,127
Individual+2 children, age 50	$1,332
Individual+3 or more children, age 21	$1,321
Individual+3 or more children, age 30	$1,375
Individual+3 or more children, age 40	$1,433
Individual+3 or more children, age 50	$1,638

Source: Healthcare.gov. Based on unsubsidized ACA plans.

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A PPO is much more expensive than a health maintenance organization (HMO) or exclusive provider organization (EPO) plan, which are much more common in the ACA marketplace.

Cost of PPO vs. HMO vs. EPO

Health plan member	PPO average monthly cost	HMO average monthly cost	EPO average monthly cost
Adult Individual age 21	$404	$342	380€
Adult Individual age 27	$423	$361	$405
Adult Individual age 30	$458	$390.00	$436
Adult Individual age 40	$516	$438.00	490
Adult Individual age 50	$721	$613.00	$685
Adult Individual age 60	$1,095	$930	$1,037

Source: Healthcare.gov. Based on unsubsidized ACA plans.

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If you’re buying an individual health insurance plan from the Affordable Care Act marketplace or directly from an insurer, your health insurance premium depends on factors such as your age, tobacco use, dependents on the plan, plan tier and your location. That’s different from employer-sponsored health insurance, which is a group plan that offers the same rates regardless of health status.

Employer-sponsored health plans are less expensive than ACA plans without government subsidies. Data from the Kaiser Family Foundation show that employees with a group health plan pay an average of $1,389 a year for a PPO plan for single coverage, and $6,428 a year for family coverage. Employers typically pay the majority of premium costs for health plans ($6,702 for single coverage on average and $16,884 for family coverage).

In general, PPO plans have higher average premiums than other types of health insurance. However, you’re getting access to a much wider network of doctors and health care facilities.

PPO Health Insurance Pros and Cons

Whether a PPO health plan is the best choice for you depends on what you want from your coverage. Here are pros and cons for PPOs.

PPO pros

• Don’t need specialist referrals: With a PPO plan, you aren’t required to work with a primary care provider, and you don’t need a referral to see specialists. It’s a good option if you feel comfortable managing your medical care on your own and don’t want the barrier of needing to go through your primary care provider (PCP) to see a specialist.
• Flexibility to go out-of-network: PPO plans allow you to receive treatment from health care providers and facilities that aren’t in-network. Other health plans, such as an EPO and HMO, often don’t pay for out-of-network care.

PPO cons

• More expensive premiums: PPO health insurance premiums are generally more expensive than other types of health insurance. If you’re healthy and visit the doctor infrequently, you might be able to find a cheaper plan to fit your needs.
• No PCP: A primary care provider can help you navigate the health care landscape, but PPOs don’t usually require that you choose a PCP.

PPO vs. HMO

Compared to PPO plans, HMO plans typically have lower premiums and cheaper out-of-pocket costs. However, HMO plans don’t usually provide any coverage for out-of-network care. If you want to see a doctor or visit a hospital that is out-of-network, you’re responsible for the entire bill and the money you pay won’t go toward your annual deductible.

On the other hand, PPO plans don’t require referrals and working with a primary care provider is optional.

PPO vs. HMO main differences

Feature	HMO	PPO
Cost	Less expensive	More expensive
Referrals required?	Yes	No
Out-of-network care?	No	Yes

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Find out: What’s The Difference Between PPO And HMO?

PPO vs. EPO

EPO plans are popular options for people who want affordable health insurance. Not only are the premiums lower compared to a PPO plan, but EPO health insurance also often has lower out-of-pocket costs. The main drawback is that you can only get coverage from an in-network provider, which means you have less flexibility and fewer provider options.

PPO vs. EPO main differences

Feature	EPO	PPO
Cost	Less expensive	More expensive
Referrals required?	No	No
Out-of-network care?	No	Yes

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PPO vs. POS

A point of service (POS) plan is a true hybrid between a PPO and HMO plan. The insurance company provides coverage for out-of-network care, but you’re responsible for a much larger portion of the cost sharing. You’re still incentivized to get treatment from an in-network provider, but you’re allowed to visit providers that aren’t in-network.

In terms of cost, POS plans are usually less expensive than PPO plans. This is because PPO plans offer the greatest flexibility to see providers in-network and out-of-network. Unlike a PPO, POS plans require referrals.

PPO vs. POS main differences

Feature	POS	PPO
Cost	Less expensive	More expensive
Referrals required?	Yes	No
Out-of-network care?	Yes (with higher cost sharing)	Yes

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Who Should Get a PPO Health Insurance Plan?

PPO insurance plans can be a good choice for individuals who want the flexibility to visit any doctor and hospital and to see specialists without a referral. If you prefer to manage your own medical care without oversight from a primary care physician, a PPO might be the right choice.

When deciding if a PPO plan is right for you, it’s also important to consider the cost. Because PPO plans offer so much flexibility, the premiums are much higher. If you want the most affordable health insurance plan with low out-of-pocket costs, a PPO plan probably isn’t the right option for you.

PPO Health Plan Frequently Asked Questions