PPO Health Insurance: How Affordable Group Plans Work

Editor’s Note: We receive a commission from affiliate links on Forbes Advisor. Committees do not influence the opinions or evaluations of our editors.

There are several health insurance plans available, which differ in network size, services covered, flexibility, out-of-pocket costs and cost.

Preferred provider organization (PPO) plans are the most popular type of health plan in the employer-sponsored market, but they make up a small portion of Affordable Care Act (ACA) plans: About 46% of Americans with employer-sponsored health plans are enrolled . PPO plan, according to the Kaiser Family Foundation. But only 19% of ACA plans are PPOs, according to Forbes Advisor’s analysis of ACA plans.

What is a PPO Health Insurance Plan?

A PPO is a type of health insurance that is known for its flexibility. Insurance companies connect with medical providers and hospitals to form networks. If you receive care from a doctor in the PPO network, the insurance company provides the highest quality care, and you pay the lowest out-of-pocket costs.

PPO plans allow you to get medical care from an out-of-network provider, but the services are limited.

Additionally, PPOs often do not require a referral from your primary care physician to see a specialist, such as an orthopedic surgeon or dermatologist.

How Does a PPO Health Plan Work?

When you go to a doctor in a PPO network, your health insurance company pays a percentage of the cost once you get your money back. You pay the rest. This is called cost sharing.

Health care providers and facilities in the PPO network agree to be paid certain fees for various services, often at a reduced cost.

For example, let’s say you hurt your hand and need an X-ray, which will cost $300. In this example, the cost of an X-ray at an online clinic has a copay of $60, while your cost at an out-of-network provider for this plan you have 35% coinsurance. For this reason, the cost of an X-ray at an online clinic can be as little as $60, compared to the $105 you would incur from an off-site visit.

With a PPO, your health insurance company tries to encourage you to get care online because it costs you less. However, you still have the ability to take care of yourself, without the need to be referred by a professional.

Although you can go to a specialist without a license, PPO plans often require a license for certain procedures, drugs or other types of care. Unless it is an emergency, you may need approval from the insurance company before moving forward with a specific treatment plan such as surgery. This prevents your insurance company from providing expensive coverage that may not be necessary.

How much does a PPO Health Insurance Plan cost?

The average monthly cost of a PPO plan for a 30-year-old is $458. See below for other generations, couples and families.

The cost of a PPO Health Plan

A PPO is more expensive than a health maintenance organization (HMO) plan or an Exclusive provider Organization (EPO) plan, which are the most common in the ACA market.

PPO cost vs. HMO vs. EPO

If you’re buying an Affordable Care Act health insurance plan through the marketplace or directly from an insurer, your health insurance premium depends on factors such as your age, smoking status, dependents on the plan, coverage area and location. This is different from employer-sponsored health insurance, which is a group plan that offers the same rates regardless of health status.

Employer-sponsored health plans are cheaper than ACA plans without government subsidies. Data from the Kaiser Family Foundation shows that employees with group health plans pay an average of $1,389 a year for a single-payer PPO plan, and $6,428 a year for family coverage. Employers typically pay the most for health plans ($6,702 for single coverage on average and $16,884 for family coverage).

Generally, PPO plans have higher premiums than other types of health insurance. However, you are getting access to many doctors and hospitals.

PPO Health Insurance Pros and Cons

Whether a PPO health plan is the best choice for you depends on what you want from your coverage. Here are the pros and cons of PPOs.

Advantages of PPO

  • Don’t want to send experts: With a PPO plan, you don’t have to work with a major provider, and you don’t have to send to see a specialist. It’s a great option if you feel comfortable managing your own health care and don’t want the barrier of going to a primary care provider (PCP) to see a specialist.
  • Flexibility to go outside the network: PPO plans allow you to receive care from health providers and hospitals that are not in our network. Some health plans, such as EPOs and HMOs, generally do not pay for outpatient care.

PPO shit

  • The most expensive fees: PPO health insurance premiums are usually more expensive than other types of health insurance. If you are in good health and visit your doctor regularly, you may be able to find an affordable option that fits your needs.
  • No PCP: A primary care provider can help you find a medical center, but PPOs often don’t require you to choose a PCP.


Compared to PPO plans, HMO plans generally have lower premiums and lower out-of-pocket costs. However, HMO plans do not provide any coverage for outpatient care. If you need to see a doctor or go to a hospital that is out of our network, you are responsible for the entire bill and the amount you pay will not go toward your annual deductible.

On the other hand, PPO plans do not require referrals and working with a large provider is essential.

PPO vs. HMO big difference


EPO plans are popular options for people looking for affordable insurance. Not only are premiums lower than a PPO plan, but EPO health insurance typically has lower out-of-pocket costs. The biggest drawback is that you can only get care from in-network providers, which means you have less flexibility and fewer provider options.

PPO vs. EPO big difference


A point of service (POS) plan is a true hybrid between a PPO plan and an HMO. The insurance company offers out-of-network care services, but you are responsible for co-pays. You are still encouraged to receive treatment from an online provider, but you are allowed to visit offline providers.

In terms of cost, POS plans are generally cheaper than PPO plans. This is because PPO plans offer greater flexibility to see in-network and out-of-network providers. Unlike PPO, POS plans require shipping.

PPO vs. POS big difference

Who Should Get a PPO Health Insurance Plan?

PPO insurance plans can be a good choice for people who want the flexibility to visit any doctor or clinic and see specialists without a referral. If you want to manage your medical care without the supervision of a primary care physician, a PPO may be the right choice.

When deciding whether a PPO plan is right for you, it’s also important to consider the cost. Because PPO plans offer more flexibility, premiums are higher. If you want the most affordable insurance with the lowest out-of-pocket costs, a PPO plan may not be the right option for you.

PPO Health Plan Frequently Asked Questions

Does a PPO offer out-of-network care?

Yes, PPO plans cover outpatient care, but they often don’t help if you receive care online. Sharing the true cost of outpatient care depends on what you want. But you often pay less for seeing a provider in a PPO network.

Do you need a general practitioner if you have a PPO?

Primary care physicians are not required if you have a PPO. You can take care of yourself and see any doctor you want, without having to see your primary doctor.

If you have a relationship with a primary care physician, you can continue to work with them. If they contract with a PPO network, their services will be provided at the highest level.

Do PPOs need a referral to see a specialist?

No, PPO insurance does not require a referral from a general practitioner if you want to see a specialist. This can speed up the process of getting special care.

If you’re choosing an individual specialist, however, be sure to check with specialists in your PPO’s network to get the most coverage from your insurance company.