What distinguishes a PPO from an HMO?

A Preferred Provider Organization (PPO) is characterized by its flexibility in choosing healthcare providers and does not impose strict network restrictions. Members of a PPO can see any healthcare provider, whether they are in-network or out-of-network, although they benefit financially from staying within the network. This structure is designed to give policyholders greater autonomy in selecting their providers without the need for a primary care physician’s referral.

The other options reflect features more commonly associated with Health Maintenance Organizations (HMOs), which typically require members to select a primary care physician and obtain referrals to see specialists, thus creating more restrictions on provider choices. Additionally, HMOs often have a more limited range of payment options compared to the more flexible provider network of a PPO. Understanding this distinction is crucial for individuals when deciding on health insurance plans that best meet their needs, as it affects access to care and overall healthcare costs.