Medicare PPO

Medicare PPO is a Preferred Provider Organization coordinated care plan. A Medicare PPO is a Medicare Advantage plan that also serves as a private alternative to Original Medicare. In a Medicare PPO, you will generally pay lower co-pays if you see providers that are in the network. However, you will also pay higher premiums than with other coordinated care plans like Medicare HMOs. In these plans, your insurance company forms a network of health care providers who you can see for medical services. Furthermore, you do not need to choose a Primary Care Physician, nor get a referral to see specialists.

What is a Medicare PPO?

Like any other Medicare Advantage plan, PPOs must provide your Parts A & B benefits and have an out-of-pocket maximum cap on your spending (typically $6,700).  You usually do not need to choose a primary care physician or get referrals to see specialists. However, each plan is different, so be sure to check the plan’s benefits summary.

Common Features of Medicare PPOs:

  • You may see out-of-network providers at a higher cost
  • Your plan may cover Part D  benefits. It’s important to note that if you have a Medicare PPO with medical benefits only, you are not allowed to have a separate Part D drug plan. To get drug coverage on a Medicare PPO plan, you must choose one with an integrated Part D plan.
  • Formularies, pharmacy and provider networks, co-payments/co-insurance, and premiums can change every January 1st so it’s important to always review your Annual Notice of Change letter each fall
  • Some plans come with “extra” benefits like coverage for vision exams or discounted gym memberships.

Costs You May Incur on Medicare PPO Plan

When you enroll in a Medicare PPO plan, you may face these costs:

  • Medicare Part B expenses ( $134/month in 2018). Some people pay more due to higher incomes.
  • You will pay a monthly premium for the Medicare Advantage PPO plan itself. Some plans may offer a $0 premium, but it depends on the plan and this can change from year to year as well.
  • There will be copays for medical services as you go along. You might pay $20 for a primary care visit or $50 for a specialist. You’ll usually pay a hospital copay that may be daily or could be one larger copay for the entire stay. Often there are some services where you will pay 20%. This is commonly seen for chemotherapy. However, every plan will outline its specific set of benefits and copays in the Summary of Benefits document. You insurance agent can go over this with you.
  • Out-of-network costs may be higher and sometimes require an up-front deductible
  • Part D drug plans are often part of the plan, so you will generally not have any additional costs for Part D.

Which is Better: Medigap or Medicare PPO?

There’s no simple response to the question. Whether one is more useful for you depends on your personal preferences. Medicare supplements (also called Medigap plans) pay after Medicare and leave you with very little out of pocket. Most of the time you will not even have a doctor copay. However, they are typically more expensive than Medicare PPO plans.

Medicare PPO plans will generally have lower premiums, but for the lowest co-pay, you have to see network providers. Furthermore, the copays are collected from you at the time of each service. This includes doctor visits, lab-work, hospital stays, surgeries, durable medical equipment, diagnostic imaging, and more.