A Medicare Advantage PPO (preferred provider organization) plan is an important option for many Medicare beneficiaries. If you’re getting ready to enroll in Medicare or perhaps considering changing plans during the Open Enrollment Period in the fall, here are 10 important things to know.
1. There are two types of PPO plans.
- In 2023, 40% of Medicare Advantage plans are local PPOs. This plan has a small service area, such as a county or part of a county.
- A regional PPO plan must do business in regions defined by the government, including both urban and rural areas, and has a contracted network that serves an entire region or regions. The availability of these plans is decreasing, and they now make up only 1% of Advantage plans.
2. Just as with other types of Medicare Advantage plans, PPO plans have networks. Your best costs will be found in seeing preferred providers, those who have contracts with the plan.
3. A PPO plan gives you the flexibility to see out-of-network providers who are eligible to participate in Medicare, no matter where you are in the United States or its territories.
4. There are no referral requirements for out-of-network providers.
5. However, know that an out-of-network or non-contracted physician or healthcare provider is under no obligation to treat plan members, except in emergency situations. They must be willing to submit the claim to and accept payment from your Medicare Advantage plan. In other words, you can choose your physicians, but they must also choose to see you.
6. Monthly premiums for PPO plans can range from zero up to $100 or more.
7. Out-of-network services can cost more. For example, in-network diagnostic services are $0-$40 and out-of-network is 40%. The same plan charges $350 a day for the first four days of a hospital stay and 40% per out-of-network stay.
8. PPO plans can set two annual limits on your out-of-pocket costs. One limit is for in-network costs, a maximum of $8,300 in 2023, and the other is for in-network and out-of-network costs combined, with a maximum of $12,450.
9. Just as with other Medicare Advantage plans, PPOs can require prior authorization, a process through which the physician or other healthcare provider must obtain advance approval from the plan. If there is no approval, the plan will not pay, and the member is likely responsible for the costs.
10. These plans can include Part D drug coverage. However, if you choose a PPO plan with no drug coverage, you cannot purchase a Part D stand-alone plan.
A PPO plan can work for those who:
- need coverage out-of-network when traveling or spending time at a summer cabin
- want the flexibility to choose healthcare providers, and
- can afford the higher cost sharing.
Before signing up for a plan, check out the benefit summary and evidence of coverage so you’ll know how the plan works and your costs. And remember, you can always switch to another Medicare Advantage plan during Open Enrollment as your health or life changes.