How does a Preferred Provider Organization (PPO) differ from a Health Maintenance Organization (HMO)?

A Preferred Provider Organization (PPO) offers members greater flexibility in choosing healthcare providers compared to a Health Maintenance Organization (HMO). Members of a PPO are not required to select a primary care provider (PCP) and have the freedom to see any specialist without needing a referral. This contrasts with HMOs, which typically require members to choose a PCP, who then coordinates care and provides referrals to specialists. The absence of this requirement in a PPO allows for more direct access to specialists and a wider range of healthcare options.

The structure of PPOs encourages members to use preferred providers within the network for lower out-of-pocket costs, but they retain the option to see out-of-network providers, albeit at a higher cost. This model promotes autonomy in care decisions, making it a more attractive option for individuals seeking flexibility in their healthcare access.