What Is A PPO? How Do PPOs Work, Pros and Cons

What is a PPO?

A PPO gives members access to any qualified healthcare provider without needing pre-approval or referral from a primary care physician (PCP). This kind of flexibility makes sense, especially for those who have chronic conditions or are parents of kids with multiple healthcare needs. Not sure if it's right for you? Read on for a breakdown of the pros and cons of PPOs.

How Does a PPO Work?

The main advantage of a PPO is that you will not need a referral from a primary care doctor to see a specialist. In fact, you do not need to choose a PCP at all. You will have access to any in-network physician, specialist, hospital, clinic, imaging center, etc., all of which have agreed to your insurer's special pricing. This is why they are “preferred."

You can also see out-of-network providers, but you will pay more than if you see one of the providers in the plan (in-network provider).

PPO Pros and Cons

The Pros

If you are the type who wants more choice in the health care professionals you see, PPO plans may fit the bill. Did your daughter suffer a bad sunburn at camp? No need to ask your primary doctor for a referral to a dermatologist. Simply schedule the appointment yourself. Looking for a psychologist you can visit during your lunch hour? Search your insurer's list of in-network psychologists and book your session. The visits will likely be covered through deductibles and copays, or coinsurance may apply.

You may find you also get more robust coverage with PPO insurance. Preventive services like annual screenings and routine checkups are usually covered within the limits of your plan, as are hospitalizations, ER visits, and outpatient surgery. Some PPO plans go a step further and cover alternative care like acupuncture, therapeutic massage, naturopathy, and chiropractic visits. You are also covered when traveling or if you want to see a specialist in another county or state.

The Cons

Of course, all this comes at a cost. PPOs generally have higher out-of-pocket costs than HMO plans. Premiums, copays, and deductibles are generally higher.

If you use an out-of-network provider, you will have to pay your copay (a set fee for the service) plus a percentage of the remaining cost (coinsurance). And since the insurer and the provider have not agreed on a fee, you may be on the hook for the balance of what the doctor charges over what your insurer will pay. For instance, let's say you sprain a wrist and visit an out-of-network orthopedist. If your insurer typically pays $500 for a visit to an orthopedist, but your orthopedist charges $700, you may be responsible for the additional $200 on top of any copays or coinsurance.

Is a PPO Worth It?

A PPO might be best for you if you want flexibility in the type of healthcare providers you see. For some, these benefits might outweigh a big drawback: PPOs are more expensive than other plans.

Managing Healthcare Costs with CareCredit

If you are looking for an option to help manage your medical bills, consider healthcare financing with the CareCredit credit card. The CareCredit card can help you pay for the care you want and need and make payments easy to manage.* Apply today and use our Acceptance Locator to find a provider near you that accepts CareCredit. Continue your wellness journey by downloading the CareCredit Mobile App to manage your account, find a provider on the go, and easily access the Well U hub for more great articles, podcasts, and videos.

Our Expert Reviewer

Patty Caballero and her team of consultants together have more than 35 years of health insurance knowledge working for some of the biggest health insurance companies in the US. She has knowledge in building brands and strategic initiatives to help consumers better understand their health benefits.