A Medicare PPO plan is a type of Medicare Advantage plan. These plans are alternatives to Original Medicare and are offered by private insurance companies.
Preferred Provider Organization (PPO) plans usually have networks of healthcare professionals and hospitals that members may choose from. Members can also seek care outside of the network.
Typically, choosing a healthcare professional who is in-network will cost less than choosing an out-of-network provider.
Read on to learn more about Medicare Advantage PPO health plans.
Glossary of Medicare terms
- Out-of-pocket cost: This is the amount a person must pay for care when Medicare does not pay the total amount or offer coverage. Costs can include deductibles, coinsurance, copayments, and premiums.
- Premium: This is the amount of money someone pays each month for Medicare coverage.
- Deductible: This is an annual amount a person must spend out of pocket within a certain period before Medicare starts to fund their treatments.
- Coinsurance: This is the percentage of treatment costs that a person must self-fund. For Medicare Part B, coinsurance is 20%.
- Copayment: This is a fixed dollar amount a person with insurance pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Medicare Advantage (Part C) plans are provided by Medicare-approved private health insurance companies.
A PPO plan includes a group of healthcare professionals and hospitals — called a network — that members may choose from. These providers will usually be cheaper than providers outside of the network.
However, most PPO plans are flexible, and a person can receive care for covered services from any healthcare professional or hospital.
Medicare Advantage plans bundle the benefits of Original Medicare (parts A and B) with Part D prescription drug coverage and certain other benefits.
Medicare Advantage PPO plans must cover the same services that Original Medicare covers. This means they provide hospital insurance (Part A) and outpatient medical insurance (Part B).
Some plans offer additional coverage including:
- vision
- hearing
- dental
Regardless of the plan a person chooses, emergency and urgent care is covered.
Medicare Advantage plans also provide some level of coverage for services such as:
- transportation to the doctor
- over-the-counter (OTC) medications
- adult day care services
- wellness programs
Prescription medications
People with a PPO plan usually have prescription drug coverage.
However, it is important to note that every PPO plan is different and may offer different coverage.
Many prescription drugs have a copay. The copay amount will usually be less for a generic drug than for a particular brand. It could be a percentage of the total or a set dollar amount.
The medication may also need prior authorization from the insurance provider before a person’s plan covers it.
The plan that a person selects can opt to deny coverage for services that are not deemed medically necessary by Medicare.
If a person is unsure if their plan covers a particular service, it is best to call the provider before receiving the treatment.
While PPO plans and Health Maintenance Organization (HMO) plans share many characteristics, PPO plans offer more flexibility.
A member of a Medicare Advantage HMO plan must usually receive care from a professional in the plan’s network.
In contrast, people with a PPO plan can choose doctors outside of their network, though it may cost more.
With HMO plans, some exceptions are made for:
- emergency care
- out-of-area urgent care
- out-of-area dialysis
While people with HMO plans usually need to choose a primary care physician from the plan’s list of providers, people with a PPO plan do not.
Learn more about the differences between HMO and PPO plans.
Medicare Advantage plans must adhere to certain rules set forth by Medicare.
However, each plan can charge variable out-of-pocket costs. They can also have different rules about how each plan member receives services, such as:
- whether a person needs to get a referral to see a specialist
- whether a person needs to see a physician, facility, or supplier who belongs to the plan’s network for routine or non-urgent care
People should be aware that these rules can change yearly, so it is best to keep informed of the changes and always call the provider before receiving treatment.
The monthly cost of a PPO plan may depend on a person’s location, the insurance provider, the services performed, and other factors.
A person usually pays a monthly premium in addition to their Part B premium for Medicare Advantage coverage.
In 2025, Medicare Part B has a monthly premium of $185. It may be higher depending on a person’s income.
Keep in mind that PPO plans often make changes on the 1st day of each year.
They may make changes to any or all of the following:
- benefits
- pharmacy network
- provider network
- premium
- copayments and coinsurance
Each plan member should remember to read their “Annual Notice of Change” letter, which is mailed each September.
What are the negatives of a Medicare Advantage PPO plan?
While Medicare Advantage PPO plans offer members greater flexibility with provider choice, there are some potential drawbacks. These include:
- smaller networks of healthcare professionals than Original Medicare
- higher costs, if a person receives care from an out-of-network doctor
- chance of service denial
- limited availability compared with HMO plans
What is the difference between a Medicare supplement and a PPO?
Medicare supplement insurance, also known as Medigap, is a form of insurance offered by third-party companies to help with the out-of-pocket costs of Original Medicare. Medigap plans do not provide any additional coverage.
A Medicare PPO is a type of Medicare Advantage plan. While Medicare PPOs are also offered by private insurance companies, they are an alternative to Original Medicare that include coverage for services not included in Part A or Part B.
A person cannot have Medicare supplement insurance if they have a Medicare Advantage plan, such as a PPO plan.
Medicare Advantage PPO plans, also known as Preferred Provider Organization plans, have a network of healthcare professionals whose services cost less than those of out-of-network providers.
PPO plans offer more flexibility than HMO plans, where a person can only go to healthcare professionals within their network.
Anyone concerned about whether their Medicare Advantage PPO plan covers a particular treatment or service should contact their provider.