What you should know:
  1. Medicare Advantage Preferred Provider Organization (PPO) Plans can provide comprehensive coverage for everything from doctor’s visits, preventive care, and lab services to hospital stays and nursing facility care.
  2. After joining, if you decide this plan isn’t the best option for your circumstances, you must wait until an applicable annual enrollment period to transfer back to Original Medicare or another approved Medicare plan.
  3. With a Medicare Advantage PPO Plan, private insurance companies manage your healthcare services through a preferred network of healthcare providers. You have the option to receive services from out of network providers, as well.
  4. Enrollment in Original Medicare Parts A and B is necessary.

What is a Medicare Advantage PPO Plan?

A Medicare Advantage PPO plan is one of the four types of Medicare Advantage Plans. Medicare Advantage Plans are also referred to as Medicare Part C, which includes coverage for Original Medicare Parts A and B. Some Medicare Advantage PPO plans also provide Part D prescription drug coverage.

What’s covered

All PPO plans must cover the same benefits as Original Medicare Part A and Part B. How you pay for your portion of costs for services looks different. For instance, if you require hospitalization, your PPO charges you a daily copay for a certain number of days. Original Medicare Part A charges a deductible for each benefit period.

Coverage for Part A and B includes:

  • Inpatient care in a hospital or Skilled Nursing Facility (SNF)
  • Short-term SNF care after a qualifying hospital stay
  • Home health care
  • Hospice care (service is covered under the Part A Hospice Medicare Benefit)
  • Outpatient medically necessary services needed to treat or diagnose your medical condition
  • Preventive care
  • Durable medical equipment (DME)
  • Ambulance services
  • Clinical research
  • Mental health care

PPO plans also typically include services which are not covered by Medicare:

  • Prescription drug coverage (so you don’t have to purchase a standalone Part D prescription drug plan)
  • Vision, dental, and hearing care (you may pay an extra monthly premium for more comprehensive coverage)
  • Fitness club memberships

How the plan works

With a Medicare Advantage PPO Plan, an insurance company manages your health care services through a group of preferred healthcare providers and medical facilities. This is called in-network care. You can choose to receive out-of-network services, but your out-of-pocket costs will be higher.

Advantages of a Medicare Advantage PPO Plan Disadvantages of a Medicare Advantage PPO Plan
PPO plans are growing in popularity among Medicare recipients. Here are some reasons why:
 

  • More flexibility in choice of providers
  • Affordable premiums
  • Don’t require you to choose a primary care physician (PCP)
  • Don’t require referrals for specialist care
  • Many plans include a drug coverage Medicare Part D option.
  • The out-of-pocket maximums limit potential medical expenses for in and out of network care.
  • Some plans include select dental, hearing, and vision coverage.
Here are some of the disadvantages of Medicare Advantage PPO plans:
 

  • Benefits, premiums, network participants, copays, and other coverage features often change year to year.
  • If your PCP leaves the network, you must choose a replacement, which can disrupt your care plan.
  • May cost more than an HMO

Who should get a Medicare Advantage PPO Plan?

A Medicare Advantage PPO plan might be a good fit if you:

  • Plan to travel and don’t want to be restricted by the more rigid network requirements of an HMO
  • Don’t want to be bound by specialist referrals from PCPs
  • Want more diverse coverage that encompasses extras, such as dental, vision, hearing, and prescription drug coverage
  • Have a larger budget to spend on premium Medicare coverage
  • Don’t want to designate a PCP
  • Don’t want to pay steep costs associated with out-of-network providers. You pay more for these services with a PPO, but with a HMO, they may not be covered at all.
  • Want access to more hospitals and providers

Compare your Medicare options

See how a Medicare PPO compares to Original Medicare and other Medicare Advantage Plan types.
Plan type Costs Part A coverage Part B coverage Part D coverage Out-of-state care
Original Medicare Part B premium Yes Yes No Yes
Medicare Advantage HMO Part B premium plus plan premium Yes Yes Usually Emergency only
Medicare Advantage PPO Part B premium plus plan premium Yes Yes Usually Emergency, plus other care if in your plan’s network, or you pay more for out of network
Medicare Advantage PFFS Part B premium plus plan premium Yes Yes Sometimes Emergency, plus other care if contracted with your plan and agrees to treat you.
Medicare Advantage SNP Part B premium Yes Yes Yes Emergency and out-of-area dialysis plus other care if in your plan’s network

Who is eligible for a Medicare Advantage PPO Plan?

You need to meet the following criteria to qualify for a Medicare Advantage PPO plan:

  • Eligibility and enrollment in Original Medicare Parts A and B is necessary.
  • You must choose a plan that is offered in your area. You can search for plans on the Medicare website.

How much does a Medicare Advantage PPO plan cost?

Expect to pay about $190 per month for your Medicare Advantage PPO plan. That includes the typical $170.10 Part B premium and an average plan cost of $19. You’ll have additional costs when you use your coverage, including:

  • Copays: You may need to pay copays if you visit the doctor or receive other medical services. The insurer sets this amount.
  • Coinsurance: You may pay a percentage of the Medicare-approved service charge after you have exhausted your deductible for the year.
  • Deductibles: You may have to pay an annual out-of-pocket amount before your insurance begins to pay for services.
  • Out-of-network charges: These may apply if you seek care from a medical provider outside your plan network. PPO plans pay for out-of-network services, but your copays and coinsurance are higher.
  • Additional services: Some plans that offer vision, dental, and hearing coverage may charge higher premiums and a separate drug deductible.

Costs vary from state to state, so it’s important to compare the plans available in your area for an accurate cost estimate.

See how costs compare for these PPO plans in Denver County, CO (plans include drug coverage):

Plan name Monthly premium Deductible Copay Coinsurance Out-of-pocket max
Aetna Medicare Prime 1 $0 $0 (health and drug) PCP: $0

Specialist: $35

40% $5,300 in network

$11,300 in and out of network combined

Anthem Mediblue Access $0 $0 (health and drug) PCP: $0

Specialist: $35

40% $6,700 in network

$10,000 in and out of network combined

HumanaChoice H5216-261 $0 $0 (health)

$195 (drug)

PCP: $0

Specialist: $40

50% $6,700 in network

$11,300 in and out of network combined

How do I enroll in a Medicare Advantage PPO Plan?

To enroll in a Medicare Advantage Plan, you first need to be enrolled in Original Medicare Part A and Part B. After you’re enrolled in Original Medicare, you can enroll in a PPO plan during your Initial Enrollment Period or during other enrollment periods throughout the year:

  • Initial Enrollment Period (IEP): This seven-month period starts three months before the month of your 65th birthday, the month of your birthday, and ends three months after your birthday month.
  • Initial Coverage Enrollment Period (ICEP): This is the enrollment period for those who want to enroll in a Medicare Advantage Plan and often occurs at the same time as the IEP for Original Medicare.
  • Annual Enrollment Period: This period runs from October 15th through December 7th.
  • Medicare Advantage Open Enrollment: Medicare beneficiaries who already enrolled in a Medicare Advantage Plan can switch plans between January 1st and March 31st.

Use the Medicare Plan finder to research available PPO plans in your area. When you’ve chosen a plan, go to the insurer’s website to check for online enrollment options or contact the insurance company by phone or email to request a paper enrollment form. You can also enroll by calling Medicare at 1-800-633-4227.

To enroll, you need your Medicare number and the date your Parts A and B coverage began. Your Medicare card has this information.

author-img
Medicare consultant

Roseann Birch has worked in the insurance industry for more than 35 years. In 2006, she moved to selling insurance and, by 2009, Birch made Medicare her area of expertise after observing the struggles of older adults to understand Medicare. Although many adults age 65 and older are eligible for Medicare, nearly just as many don’t understand how it works.

Birch has learned the ins and outs of Medicare and its variations and supplements to help beneficiaries and their families understand benefits. She finds there is often misinformation and makes it her mission to clear up the confusion so that everyone can enjoy the full extent of Medicare benefits.

Sources