How to Compare PPO and High-Deductible Insurance Plans

by Linda Ray

A preferred provider organization, or PPO, is a type of health insurance that provides a network of health providers from which you can choose. Unlike a health maintenance organization, or HMO, you don’t need to have a referral to see a specialist and you don’t need to choose a primary care physician to make referrals. A high-deductible health insurance plan typically reduces your premium and requires you to pay more out-of-pocket before benefits kick in. There are a number of factors to consider when choosing between a PPO with low premiums and an insurance plan with high deductibles.

1. Look at the list of in-network doctors, hospitals and specialists offered by the PPO. If you can find enough health care providers in the network for your needs, you should choose the lower-deductible PPO. Most PPOs charge higher deductibles when you use providers not participating in the company’s network.

2. Examine all your potential out-of-pocket expenses. Most insurance plans have fixed fees in addition to the deductible that could influence your decision. For example, co-insurance fees may be required at every visit or for every prescription you fill. Most PPOs have co-pay requirements.

3. Compare the premiums, or monthly payments required for each policy. High-deductible plans usually offer lower premiums, while lower-deductible plans cost more. Consider how often you expect to use your insurance and weigh the total costs of co-pays and premiums of a PPO against the initial higher costs you’ll have with a high-deductible policy.

4. Evaluate your future healthcare needs. If you typically only require routine checkups, you may be better off with a high-deductible policy that allows you to save more money. When you enroll in high-deductible insurance, you may be eligible to open a health savings account that allows you to save for medical expenses and deduct the savings from your taxes.


  • A PPO usually comes with a maximum limit on co-payments and deductibles. Once you reach that limit, the plan pays 100 percent of your healthcare costs. If you use the in-network providers and expect to incur hefty medical bills, your best bet is a PPO that offers a limit on out-of-pocket expenses.
  • Many high-deductible PPO plans provide 100 percent coverage for preventive care such as annual checkups. If you are generally healthy, you can still take advantage of preventive services without increasing your out-of-pocket expense.


  • If your preferred healthcare provider is outside of your PPO network, the plan may not provide the most cost-efficient program for you. You may be better off paying lower premiums and use the money you save to pay off the higher deductible and keep the doctors with whom are most comfortable.

Items you will need

  • List of providers
  • Fee chart

About the Author

Linda Ray is an award-winning journalist with more than 20 years reporting experience. She's covered business for newspapers and magazines, including the "Greenville News," "Success Magazine" and "American City Business Journals." Ray holds a journalism degree and teaches writing, career development and an FDIC course called "Money Smart."

Photo Credits

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