What is a PPO?

A Preferred Provider Organization (PPO) is a managed care health insurance plan that allows members to choose their healthcare providers, offering them flexibility and a wider network of providers. In a PPO, insurance companies negotiate rates with preferred providers, which can include doctors, specialists, and hospitals, to provide healthcare services at a reduced cost to members. This arrangement not only provides cost savings but also gives members the ability to see specialists without the need for a primary care physician's referral. The structure of a PPO typically encourages members to utilize in-network providers for lower out-of-pocket expenses while still allowing access to out-of-network providers, albeit at a higher cost. This balance of breadth of options and cost management makes PPOs a popular choice among health insurance plans.