Understanding all your health insurance options can be confusing. It may be hard to know which plan is best for your needs and your budget.

Many Americans get health insurance through their employers. Others look for coverage through the state health insurance marketplace.  Either way, when looking to purchase a health plan, a preferred provider organization (PPO) is often one of your choices. Depending on the state you live in, the PPO options can vary.

Here are some key things to know about PPOs:

A PPO offers a network of health care providers
A managed care network of doctors, hospitals and other providers like dentists and eye doctors is a core benefit of a PPO. They contract with insurance companies to offer care at negotiated lower costs for member patients. When you see a doctor or go to a hospital in your network, they’ll charge fees at the lower rate they agreed to in their contract. You can still use a doctor out of your network, but it will cost a lot more.

A PPO is just one type of health plan
Most people have access to PPOs through their employers, but not everyone. If you can’t choose a PPO health plan, or want something with a lower monthly premium, there are three other options:

• Health maintenance organization (HMO)
• High-deductible health plan (HDHP)
• Consumer-driven health plan (CDHP)

If you rarely go to the doctor and have no health concerns, the savings you get on premiums with one of these plans may help your budget. Think about your current health care needs and finances before choosing a health plan. When you choose carefully, it can help you save money.

A PPO might be right for you if you need to go to doctors often or are worried about high health care expenses. If you can participate in a PPO through your employer, or you have this option through your state’s Marketplace, this type of plan can help you pay less when your health needs require more care.

Know what you’ll pay with a PPO Plan
Depending on which PPO plan you choose, you will either have a flat copay fee, or even no copay, for things like doctor and hospital visits. You may have to meet a deductible, but once you do, you only pay a percentage of the cost for covered services. Preventive services are covered at no cost to you when you see a doctor in your network. Also, with this plan, you can use a Flexible Spending Account to help pay your medical bills.

A PPO plan saves you money when you use doctors, hospitals and other providers in your network. Once you hit your out-of-pocket maximum, the plan pays covered qualified medical expenses  set by the Internal Revenue Service (IRS) at 100 percent.

Know not all doctors take every PPO plan
To get the cost savings from the lower rates your network providers offer, make sure your doctor or hospital is in your PPO network. To check your providers, use the Blue Cross and Blue Shield Find Care tool. This tool allows you to find providers covered by your plan.

It’s always smart to weigh out the costs of any health plan you are considering with the amount of care you think you’ll need. With a PPO you’ll pay higher monthly premiums and in some plans, have copays for tests and doctor visits. But a PPO offers more coverage. As long as you use in-network care, you’ll also pay less for doctor services, hospital stays, surgeries and costly medical tests.

If you have an ongoing medical condition or you know your family needs to plan for some larger upcoming medical expenses, a PPO plan may be right for you.

Sources: Health Insurance Plan and Network Types,  Healthcare.gov; Medical and Dental Expenses,  IRS, 2024