PPO (Preferred Provider Organization)

What Is a PPO?

A PPO, short for Preferred Provider Organization, is a type of health insurance plan.  PPO plans give you flexibility when finding healthcare providers by giving you an approved network of preferred doctors, specialists, and hospitals.  These health care providers have all agreed to charge a negotiated rate for covered medical services, which can in turn pass the savings onto you.

How PPOs Work

It's important to note that while you have the ability to see any practitioner you want with a PPO, the level of coverage and your out-of-pocket expenses will be higher if you go out of your network for care. 

For instance, if you see a general practitioner in your network, your PPO may cover 100% of the visit, and you may not have any out-of-pocket expenses. However, if you choose to go to a health care provider who is outside of your preferred network, your PPO plan may only cover a portion of the medical expenses you incur. 

Pros and Cons of a PPO Plan


There are many advantages to enrolling in a PPO plan, and they include:

More Flexibility

With a PPO plan you have the ability to see health care providers both in-network and out-of-network and receive reimbursement for both.  It is worth noting that going out-of-network can result in higher out-of-pocket costs.

More Control

Your PPO plan does not require you to choose a primary care physician.  This means you don’t have to go through a referral process to see a specialist.

More Coverage

PPO plans typically more medical services than other plans.  These services can include preventive services, emergency care, prescription coverage, and more.

PPO plans also have a preferred network wherever you go.  This means you don’t have to worry about where you receive medical services if you are on your annual family vacation.


There are also some drawbacks to enrolling in a PPO plan, and these can include:

Higher Costs

With PPO plans you will be responsible for more out-of-pocket costs such as copayments.  PPO plans typically have higher deductibles as well, which can result in higher medical bills.

Limited Preferred Network

While your PPO plan will allow you to see health providers out-of-network, the costs can be greater than if you were to stay in-network.  If you have a limited preferred network of health providers, you may see higher costs.

Filing Claims

Unlike other plans, a PPO plan may hold you responsible for filing your own claims when visiting health providers.  This can be time consuming, complex, and a hassle if you are unfamiliar with the process.  If you don’t file the claim correctly or completely, there is a possibility that you will be on the hook for medical expenses that may be covered otherwise. 

PPO vs. HMO: What’s the Difference?

When you're shopping for insurance, you'll probably notice that an alternative to PPO plans is an HMO, or Health Maintenance Organization. These types of insurance policies are somewhat similar because they both provide care from a network of physicians. The major differences are that you must get a referral from your primary care physician before seeing a specialist if you have an HMO, and doctors who aren't in your network aren't covered.

Curious if a PPO plan is right for you? Find out by speaking to one of our experienced agents 858-771-4087 or enter your zip code here!