Quick answer
A PPO (preferred provider organization) is a health plan with a network of doctors and hospitals that also pays part of the cost when you go outside that network. You can usually see specialists without a referral. That flexibility costs more: PPOs tend to have higher premiums than HMOs, and out-of-network care comes with higher deductibles and coinsurance.
Key takeaways
- PPOs cover both in-network and out-of-network care, but you pay much more out of network.
- You usually don’t need a primary care doctor or referrals.
- Out-of-network providers can bill you for the difference between their charge and what the plan pays, except in emergencies and some other cases protected by federal law.
- Premiums are usually higher than for HMO or EPO plans. See how EPO plans work.
- PPOs are common in job-based coverage but hard to find on the ACA marketplace in many areas.
How a PPO works
A PPO contracts with a network of “preferred” providers who agree to lower rates. You can see any of them without a referral. You can also see providers outside the network, and the plan will pay part of the cost, but:
- The out-of-network deductible and coinsurance are higher, often much higher.
- The plan pays based on what it considers a reasonable charge. An out-of-network provider can bill you for the rest, which is called balance billing.
- Some out-of-network costs don’t count toward your out-of-pocket maximum.
Federal law protects you from balance bills for emergency care and for out-of-network doctors, like anesthesiologists, at in-network hospitals. See what to do about out-of-network costs.
Advantages
- Flexibility. Keep a doctor who isn’t in the network, or get a second opinion anywhere.
- No referrals. See specialists directly.
- Coverage while traveling. Many PPOs have broad or national networks.
Disadvantages
- Higher premiums than HMOs and EPOs.
- Higher costs out of network, plus possible balance billing.
- Deductibles. Most PPOs have a deductible for in-network care and a separate, higher one out of network.
Who a PPO fits
A PPO makes sense if you want to keep specific doctors who aren’t in local HMO networks, travel or live part of the year in another state, or want to see specialists without referrals. If your doctors are in an HMO’s network, an HMO plan usually costs less. Which is better, a PPO or an HMO compares them side by side.
Before you use a provider, check whether they’re in your network. Even on a PPO, in-network care is much cheaper.
Looking for PPO plans in your area? Compare quotes by ZIP code.
Frequently asked questions
Do PPOs require referrals?
Usually not. You can see in-network and out-of-network specialists directly, though some services still need prior approval.
Why are PPOs hard to find on the marketplace?
Many insurers offer only HMO or EPO plans in the individual market to keep premiums down. Some offer PPOs off the exchange or in certain areas.
Does out-of-network care count toward my out-of-pocket maximum?
Often not, or it counts toward a separate, higher out-of-network limit. Check your plan’s summary of benefits.
Is a PPO worth the extra cost?
It is if you’ll use the flexibility, like keeping an out-of-network doctor. If you’re happy with an HMO’s network, you’re paying for flexibility you won’t use.
Sources
This article is general information, not insurance advice. Network rules and costs differ by plan, so check your plan documents or ask the insurer. Last reviewed September 2026.