Preferred Provider Organization (PPO)

A PPO, or preferred provider organization, is a health insurance plan consisting of contracted health insurance companies and healthcare providers. Under a PPO, preferred providers are the facilities and providers in contract with the plan. These providers offer their healthcare services at a lower rate to PPO members.  

What is the difference between a PPO and an HMO? 

An alternative to a PPO plan is a health maintenance organization (HMO) plan. HMO plans don’t usually cover out-of-network services, other than some exceptions like emergency care. In contrast, PPO plans offer coverage with out-of-network providers, though this is generally at a higher rate than in-network.  

Further, PPOs do not require individuals to have a primary care physician (PCP) or referrals for specialists, while HMOs do. 

PPOs often have higher copays, premiums and deductibles. The most significant consideration in choosing between these health plans is the cost versus the accessibility.