If you've ever felt frustrated by needing a referral just to see a specialist, or worried about what happens if you get sick while traveling, a PPO health insurance plan might be exactly what you're looking for. PPO stands for Preferred Provider Organization, and it's the most popular type of health insurance in the country for a good reason—it gives you control over your healthcare decisions without making you jump through hoops.
Here's what makes PPOs different: you can see any doctor you want, any time you want. No gatekeepers. No waiting for referrals. And unlike other plans, if you need to go out-of-network, you're not completely on your own—your plan still helps cover some of the costs. Let's break down how PPO plans work, what they cost, and whether one is right for you.
How PPO Plans Actually Work
Think of a PPO plan like having a preferred list of restaurants where you get a discount, but you're still free to eat anywhere you want. Your insurance company partners with a network of doctors, hospitals, and clinics—these are your in-network providers. When you use them, you'll pay less out of pocket because they've agreed to discounted rates with your insurer.
But here's where PPOs shine: you can still see out-of-network doctors, and your plan will cover part of the cost. You'll pay more—sometimes significantly more—but you're not stuck paying the entire bill yourself. This is a huge difference from HMO plans, which typically won't pay anything for out-of-network care except in emergencies.
Another major perk? No referrals required. If you notice a weird mole and want to see a dermatologist, you just make an appointment. Need to see a cardiologist? Book it yourself. With an HMO, you'd first need to see your primary care doctor, get a referral, and then schedule with the specialist. PPOs cut out that middle step, which can save you time and get you the care you need faster.
What PPO Plans Actually Cost in 2024-2025
Let's talk numbers, because flexibility comes with a price tag. If you're buying a PPO plan on the individual marketplace, you're looking at an average of $512 per month for a 30-year-old—that's about $85 more per month than an HMO. Over a year, that adds up to roughly $1,000 more in premiums.
For employer-sponsored plans, the numbers are higher but you're typically splitting the cost with your employer. In 2024, annual PPO premiums averaged $9,383 for individual coverage and $26,678 for family coverage. That's about $400 more per year than the average employer plan, but remember—your employer usually pays the majority of this premium.
Deductibles are another story. The average PPO deductible is $1,252, and here's the catch—only 12% of PPO plans don't have a deductible at all. Compare that to HMO plans, where 46% have no deductible. So even though you're paying higher premiums with a PPO, you're also more likely to have a deductible you need to meet before your insurance kicks in.
When you go out-of-network, your costs can really climb. You'll typically pay a higher deductible, higher copays, and a higher coinsurance percentage. For example, your in-network coinsurance might be 20%, meaning you pay 20% of the bill after your deductible. Out-of-network, that could jump to 40% or 50%. Plus, out-of-network providers can bill you for the difference between what they charge and what your insurance pays—something called balance billing.
In-Network vs. Out-of-Network: Understanding the Real Difference
Here's something that surprises a lot of people: staying in-network can save you thousands of dollars, even with a PPO. Your insurance company negotiates rates with in-network providers, so a procedure that might cost $5,000 at the sticker price could be negotiated down to $2,000. You only pay your portion of that $2,000—maybe $400 if you have 20% coinsurance.
Go out-of-network, and that same procedure might cost the full $5,000. Your insurance might only cover it as if it cost $2,000 (the in-network rate), and you're on the hook for 40% of that plus the entire $3,000 difference. Suddenly, you're paying $800 (your coinsurance) plus $3,000 (the balance) for a total of $3,800—nearly ten times what you'd pay in-network.
That said, there are smart reasons to go out-of-network. Maybe you've been seeing the same psychiatrist for five years and they don't take your new insurance. Maybe you need a specialist for a rare condition and the best doctor isn't in your network. PPOs give you the option to make that choice and still get some help with the bill, which is valuable when the stakes are high.
When a PPO Makes Sense (and When It Doesn't)
A PPO is a great fit if you value having options. You travel a lot for work or pleasure? PPOs protect you nationwide—you're not limited to a local network. You have doctors you love who might not be in-network? PPOs let you keep seeing them without paying the full freight. You have a chronic condition that requires seeing multiple specialists? The no-referral-needed feature of PPOs can be a huge time-saver.
PPOs also make sense if you're willing to pay more for peace of mind. Maybe you want to know that if you get sick while visiting family in another state, you can walk into any hospital and get care that's at least partially covered. That security is worth the higher premiums for a lot of people.
On the flip side, a PPO might not be worth it if you're young, healthy, and trying to minimize your monthly expenses. If you rarely go to the doctor, don't have established provider relationships, and would be fine using a primary care physician as your care coordinator, an HMO could save you over $1,000 a year in premiums. You can always switch during the next open enrollment if your needs change.
Also worth noting: PPO plans aren't available in all states on the ACA marketplace. Some states only offer HMO or EPO plans. If you're shopping for individual coverage, check what's actually available where you live before setting your heart on a PPO.
How to Get Started with a PPO Plan
If you have health insurance through your employer, check whether they offer a PPO option during your next open enrollment period. Compare the premiums, deductibles, and out-of-pocket maximums against other plan types they offer. Look at your actual healthcare use from the past year—how often did you see doctors, which specialists did you need, and were they in-network? That'll tell you whether the extra cost is worth it.
Shopping on the individual marketplace? Use HealthCare.gov or your state's exchange to compare plans. Filter by PPO if that's what you want, but also look at the provider networks. A PPO with a tiny network isn't much better than an HMO. Check whether your current doctors are in-network for each plan you're considering—most insurers let you search their provider directories online.
Once you're enrolled, take time to understand your specific plan's rules. What's your in-network deductible versus out-of-network? What's your coinsurance split? What's your out-of-pocket maximum? These details matter when you're deciding whether to use that out-of-network specialist or find someone in-network. The flexibility of a PPO is only valuable if you understand how to use it strategically.
At the end of the day, PPO plans are popular because they strike a balance between cost and freedom. You'll pay more than you would for an HMO, but you get the flexibility to see the doctors you trust, skip the referral runaround, and have coverage wherever you are. If those things matter to you—and for nearly half of Americans with employer coverage, they do—a PPO might be the right choice. Ready to explore your options? Start by comparing what's available where you live and see if the benefits justify the cost for your specific situation.
