A Medicare Preferred Provider Organization (PPO) plan is a type of Medicare Advantage Plan (Part C). Having a good understanding of the plan’s inner-workings and coverage will help you avoid any medical bill surprises down the road.

How Do Medicare Advantage PPO Plans Work?

A Medicare Preferred Provider Organization (PPO) plan is a type of Medicare Advantage Plan. To purchase an Advantage PPO Plan, you must be enrolled in Medicare Parts A and B. You can enroll in an Advantage PPO plan during your Initial Enrollment Period or the Medicare Open Enrollment period that occurs every year between October 15th and December 7th. For more information visit Original Medicare Parts A and B Enrollment.

The Advantage PPO is sold by private insurance companies. While the government requires Medicare Advantage PPOs to provide basic services, the plans vary by state and by insurance company. In addition to basic health services, some PPO plans have some coverage for:

  • Hearing
  • Vision
  • Dental
  • Some even provide coverage for gym memberships.

A PPO has a network of providers, and you will be given a list of doctors, hospitals, laboratories, and other healthcare providers who are in the network. Network providers have agreed with the plan to provide services at a discounted rate.

Am I Only Covered for Treatment by Doctors and Hospitals That Are in The Network?

You are not limited to seeking care from network providers and can seek treatment from any physician you want to, whether that doctor is in the network or not. You are covered if you are patient in a hospital that is not in the network. But you will generally have a higher co-pay or co-insurance for care provided by doctors and facilities that are not in the network. Some policies have a substantially greater co-pay for out-of-network care.

Do I Choose a Primary Care Physician?

You do not choose a primary care physician. Your care is not monitored or managed by a primary care physician. This means you do not need a referral to see a specialist.

What About Prescription Drugs?

Be careful when choosing an Advantage PPO plan. Make sure the plan also includes Medicare Part D, a prescription drug plan. Most Advantage PPO plans do include this, but not all. If the plan does not offer prescription drug coverage, and you choose the PPO Advantage plan anyway, you are not allowed to join a separate Medicare Part D Plan.

What Happens if I Need to go to The Emergency Room or to Urgent Care?

You always have coverage for an Emergency Room or Urgent Care visit. Again, if you go out of the PPO network, you will pay more than if you seek treatment from an ER or Urgent Care that is within the network.

What are the Costs of an Advantage PPO Plan?

Before purchasing and Advantage PPO Plan it is important to understand all expenses:

  • You will continue to pay your Medicare Part B premium.
  • If the Advantage plan also charges a monthly premium, you will also need to pay that. Some Advantage plans do not charge a monthly premium and you just continue to pay your Medicare Part B premium.
  • You will also pay any co-pays, co-insurance, and deductibles according to the individual terms of the Advantage PPO plan you select.
  • Advantage PPOs have a cap on annual out-of-pocket costs. This amount varies by policy, but when you reach that cap, you will not pay for any more services and your plan will be responsible for the remainder of your covered health care costs for the year.

When do I enroll in an Advantage PPO plan? You can enroll in an Advantage PPO plan during your Initial Enrollment Period. If you are not enrolled and want to enroll in such a plan, or want to change to a different PPO plan, you can do so during the Annual Enrollment Period that occurs every year from October 15th through December 7th.

You cannot enroll at any other time unless you qualify for a Special Enrollment Period.

Medicare PPO Plan vs. Medicare HMO Plan

There are some differences between a Medicare Advantage PPO plan and a Medicare HMO plan. An HMO has a provider network, but unlike a PPO where you can choose to pay more and see a provider outside the network, with an HMO, you must see a provider within the network or there is no coverage.

With an HMO, your care can generally be managed by a primary care physician who you choose when you enroll in the plan. You may need a referral from your primary care physician to see a specialist.

Due to the flexibility in coverage, premiums and deductibles for a PPO are generally higher than premiums and deductibles for an HMO.

Medicare PPO Vs. Original Medicare

Original Medicare is run by the federal government whereas private insurance companies run Advantage PPO plans. Original Medicare does not have PPOs or provider networks.

With Original Medicare, you can see any doctor you want to and do not need a referral for a specialist. You just need to be sure the health care provider accepts Medicare patients on assignment and that the service provided is a covered service.

If you receive treatment and later find out the doctor does not accept Medicare assignment, you will be liable for the entire fee for service. If the doctor tells you that he or she accepts Medicare patients, but does not accept assignment, then you will be liable to pay for any fee charged for the service that Medicare did not pay.


  1. Preferred Provider Organization (PPO), Medicare.