Medicare · Supporting
What is a Medicare PPO plan? How it works and what it costs
Last reviewed October 12, 20267 min readBy the Goodsurance editorial team Reviewed by the Goodsurance editorial team
A Medicare PPO is a kind of Medicare Advantage plan (Part C). PPO stands for Preferred Provider Organization. Like every Medicare Advantage plan, it is run by a private insurer approved by Medicare, and it covers everything Original Medicare covers. What makes a PPO different is choice. You can see any doctor who takes Medicare, and you do not need a referral to see a specialist. You pay less when you stay in the plan's network and more when you go outside it.
What a Medicare PPO is
A PPO has a network: a list of doctors and hospitals that agreed to the plan's prices. You can use doctors in the network or out of it. In network costs you less.
Here is what that means day to day:
- No primary care doctor required. You do not have to pick one main doctor.
- No referrals. You can book a visit with a specialist on your own.
- A monthly premium, most of the time. Most PPOs charge a premium on top of your Part B premium.
- Drug coverage, most of the time. Most PPOs include Part D drug coverage. Check each plan.
PPOs are one of several kinds of Medicare Advantage plans. The other big one is the HMO, which keeps you in network. To see the two side by side, read HMO vs. PPO Medicare Advantage plans.
In network vs. out of network: what changes
Every PPO has two price levels. Doctors in the network have a deal with the plan, so your copays and coinsurance are lower there. Doctors outside the network must still take Medicare, but the plan pays a smaller share. You pay more for the same visit.
Before you see a doctor out of network, call the plan. Ask if the care is covered and medically needed. That one call can save you a surprise bill.
| In network | Out of network | |
|---|---|---|
| Who you can see | Doctors and hospitals in the plan's network | Any doctor or hospital that takes Medicare |
| What you pay | Lower copays and coinsurance | Higher copays and coinsurance |
| Referral to a specialist | Not needed | Not needed |
| Before you go | Check that the doctor is still in network | Call the plan to confirm the care is covered |
| Yearly cap on what you pay | The in-network cap | A higher combined cap for both |
| Emergency or urgent care | ✓ | ✓ |
Emergency and urgent care are always covered. Source: Medicare.gov, "Preferred Provider Organizations (PPOs)."
Your yearly cost cap in 2027
Every Medicare Advantage plan has a yearly cap on what you pay for covered care. It is called the maximum out-of-pocket limit, or MOOP. Once you reach it, the plan pays 100% of covered care for the rest of the year. Original Medicare alone has no cap like this.
A PPO has two caps. One is for in-network care. The other is a combined cap for in-network and out-of-network care added together.
- In-network cap: for 2027, no plan can set it higher than $9,850 (it was $9,250 in 2026).
- Combined cap: for 2027, no plan can set it higher than $14,800 (it was $13,900 in 2026).
Many plans set lower caps. KFF found that in 2026, the average in-network cap was $5,421 across all Medicare Advantage plans. Check the caps for each plan you look at.
If your PPO includes drug coverage, drugs have their own cap. In 2027, the most you pay for covered drugs is $2,400.
Rules every Medicare PPO must follow
Medicare sets some rules that every PPO has to follow. They protect you no matter which plan you pick.
Rules every Medicare PPO must follow
Emergency and urgent care are always covered
In network or out, at home or away.
No drug coverage? You cannot add a Part D plan
Most PPOs include drug coverage. If yours does not, you cannot join a separate Medicare drug plan.
Some care cannot cost more than Original Medicare
This covers chemotherapy, dialysis, and skilled nursing facility care.
An approval lasts as long as you need the care
The plan cannot keep asking for new approvals for the same treatment.
Switching plans mid-treatment? You get 90 days
Your new plan must give you at least 90 days before it asks for a new approval.
Prior authorization in PPO plans
A PPO can still ask for prior authorization. That means the plan must approve some care before it agrees to pay. It often comes up for costly care, like advanced scans or some surgeries.
Under a CMS rule called CMS-0057-F, which started January 1, 2026, a plan must decide a standard request within 7 calendar days. An urgent request, when waiting could seriously harm you, must be decided within 72 hours. If the plan says no, it must give you a specific reason.
If you know you will need a certain treatment or specialist, ask each plan what needs approval before you join.
Downsides of a Medicare PPO
A PPO gives you room to move, but it has trade-offs:
- Higher premiums. KFF found that PPOs charged higher premiums than HMOs, on average, in 2026.
- Out-of-network care costs more. You pay a bigger share, and the doctor must take Medicare.
- Two caps, and the combined one is higher. If you use a lot of out-of-network care, you can pay more before the plan pays it all.
- Things can change each year. Doctors can leave the network, and costs can change. If your doctor leaves, the plan must tell you.
- Going back to Medigap is not always easy. If you leave Medicare Advantage later, a Medigap insurer may charge you more or say no because of your health, unless you have a special right to buy.
A Medicare PPO at a glance
Upsides
- You can see doctors out of network
- No referrals to see a specialist
- A yearly cap on what you pay
- Drug coverage is usually included
Downsides
- Premiums are often higher than HMOs
- Out-of-network care costs more
- A higher cap when you use both
- Networks and costs can change each year
Sources: Medicare.gov PPO page; KFF, 2026.
Local vs. regional PPOs
There are two kinds of PPO. A local PPO serves one county or a group of counties that the plan picks. A regional PPO serves a whole region that Medicare sets, which can be one state or several states.
A regional PPO can help if you often cross state lines. Most people in PPOs are in local plans, and regional PPOs are not offered everywhere. Plan Finder shows which ones serve your ZIP code.
When you can join, switch, or leave a PPO
Open Enrollment runs October 15 to December 7. You can join a PPO, switch to a different plan, or go back to Original Medicare. The plan must get your request by December 7, and your new coverage starts January 1.
The Medicare Advantage Open Enrollment Period runs January 1 to March 31. If you are already in a Medicare Advantage plan, you can switch to a different one, or go back to Original Medicare and join a drug plan. The change starts the first of the next month.
You may also be able to join when you first get Medicare, or if you move or lose other coverage. See Medicare enrollment periods for every window.
When you can join, switch, or leave a PPO
Outside these windows, most people wait for the next one unless a special rule applies.
What a PPO does not change
A PPO's freedom does not reach everything. Dental, vision, and hearing benefits differ from plan to plan. Gym and fitness perks differ too, and not every plan has them. Long-term custodial care, like help with bathing and dressing in a nursing home, is not a Medicare benefit at all.
You also keep paying your Part B premium, on top of any premium the PPO charges. If your income is higher, you may pay more for Part B and for drug coverage. See Medicare IRMAA, the income brackets explained.
Is a Medicare PPO worth it?
A PPO is worth it for people who will use its freedom. If you travel, split the year between two places, or want to keep a doctor who is not in any HMO network, a PPO lets you keep that care. If all your doctors are in a nearby HMO network, you may be paying for room you do not use.
Original Medicare with a Medigap plan is a third path. It works with any doctor in the country who takes Medicare. But you pay a Medigap premium, and you buy drug coverage on its own.
Not every county has the same PPOs. Use Medicare Plan Finder to see the plans where you live, with your own doctors and drugs. For a side-by-side look, see HMO vs. PPO Medicare Advantage plans.
- You want to keep a doctor who is out of network
- You travel or live in two places
- You see specialists and want to skip referrals
- All your doctors are in an HMO network
- You get almost all your care close to home
- A low premium matters most to you
Common questions about Medicare
Quick answers, fast .
Tap any question to expand. Each links to a fuller standalone answer.
Which is better for Medicare, HMO or PPO?
Neither is better for everyone. An HMO usually costs less but keeps you in network. A PPO costs more but lets you see doctors out of network. Pick the one that fits your doctors, your budget, and how much you travel.
What are the disadvantages of a PPO plan?
PPOs often have higher premiums than HMOs. Out-of-network care costs you more, and the combined cost cap is higher. Networks and costs can change each year.
Is a Medicare Advantage PPO plan worth it?
It can be, if you will use the freedom it gives you. That means travel, two homes, or a doctor you want to keep who is out of network. If all your doctors are in an HMO network, you may not need it.
Do doctors prefer HMO or PPO for Medicare?
There is no single answer. Each doctor decides which plans to join. What matters is whether your doctor is in the network of the exact plan you pick. Call the office and give the full plan name.
Is there a cap on what I pay out of pocket with a Medicare PPO?
Yes. For 2027, a plan can set its in-network cap no higher than $9,850. Its combined cap for in-network and out-of-network care can be no higher than $14,800. Many plans set lower caps.
Can I add a separate Part D drug plan to a Medicare PPO?
No. Most PPOs include drug coverage. If your PPO does not, you cannot join a separate Medicare drug plan.
Is emergency care covered if I am out of network?
Yes. Emergency and urgent care are always covered on a Medicare PPO, in network or out.
Do I still pay the Part B premium with a PPO?
Yes. You keep paying your Part B premium in addition to any premium the PPO charges.
References
- Medicare.gov: Preferred Provider Organizations (PPOs)Premiums, drug coverage, out-of-network care, and the special rules every PPO follows.
- Medicare.gov: Health Maintenance Organizations (HMOs)How HMOs differ, and what happens when a doctor leaves the network.
- Medicare.gov: Joining a planOpen Enrollment and the Medicare Advantage Open Enrollment Period.
- Medicare.gov: Medicare Plan FinderCompare plans with your own doctors and drugs.
- CMS: CY 2027 MOOP and Cost Sharing Limit CalculationsThe 2027 in-network ($9,850) and combined ($14,800) caps, in the "CY 2027 MOOP and Cost Sharing Limit Calculations" file on the CMS Medicare Advantage Rates and Statistics page.
- CMS: 2027 Medicare Advantage and Part D Rate AnnouncementThe 2027 Part D out-of-pocket cap.
- CMS: Interoperability and Prior Authorization Final Rule (CMS-0057-F)Decision times of 7 days (standard) and 72 hours (urgent), starting 2026.
- KFF: Medicare Advantage in 2026Premiums and out-of-pocket limits by plan type, including the $5,421 average in-network cap.
- Medicare.gov: When can I buy a Medigap policy?Medigap rights if you leave Medicare Advantage.
- Medicare Interactive (Medicare Rights Center): PPO basicsLocal and regional PPOs.