Preferred provider organization (PPO)

What is a Preferred Provider Organization (PPO)?

A preferred provider organization (PPO) is a type of health insurance plan that allows patients to receive care from a network of preferred healthcare providers. PPOs typically offer more flexibility than health maintenance organizations (HMOs) because patients can choose to see providers outside the network, but they may have to pay higher out-of-pocket costs for doing so.

Example: A patient with a PPO plan may choose to see a preferred provider for a routine checkup because the cost would be fully covered by their insurance. However, if they decide to see an out-of-network provider for a specialized procedure, they may have to pay a higher out-of-pocket cost.