Medical Expense✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
Which statement correctly describes a PPO (preferred provider organization) plan?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A PPO contracts with a network of preferred providers but allows members to seek care outside the network. Using in-network providers results in lower out-of-pocket costs (negotiated rates and lower coinsurance), while out-of-network care is covered at a reduced level with higher cost-sharing. No gatekeeper or referral is required in a PPO.
Why the other options are wrong
- B) Referrals from a gatekeeper are an HMO feature; PPOs generally allow members to see specialists directly.
- C) Out-of-network care is covered by a PPO, just at a lower benefit level than in-network care.
- D) PPOs typically do not require a primary care physician selection, let alone forbid changing it.
Memory hook
PPO = pick your provider, pay a premium for the privilege of going out of network.