What does “Preferred Provider Organization (PPO)” mean?

A Preferred Provider Organization (PPO) refers to a health insurance plan that provides a network of preferred healthcare providers. Members of a PPO can receive care from these preferred providers at a lower cost, encouraging them to use the network for their healthcare services.

In addition to the benefits of using in-network providers, PPOs also offer some level of coverage for out-of-network services, allowing members the flexibility to seek care outside of their preferred network, albeit at a higher cost. This feature is vital as it provides consumers with greater choice and access to a broader range of healthcare services, accommodating situations where their preferred providers or specialists might not be available in-network.

The other options do not accurately reflect the nature of a PPO. For instance, insurance without any provider network typically describes indemnity plans rather than PPOs. Similarly, a plan that covers only emergency services would be a different type of insurance that does not align with the broader access provided by a PPO. And while some PPOs may be offered through employers, they are not exclusively employer-sponsored, as individuals can also purchase PPO plans on the marketplace or through other means.