What is a PPO plan?

A PPO plan stands for Preferred Provider Organization. This type of health insurance plan offers a network of healthcare providers, including hospitals and doctors, who agree to provide services at reduced costs for members of the PPO. Members are encouraged to use these preferred providers to maximize their health benefits, as visiting in-network providers usually results in lower out-of-pocket expenses.

PPO plans are characterized by their flexibility, allowing members to see any doctor or specialist without requiring a referral. However, using out-of-network providers typically incurs higher costs. This structure allows for a blend of managed care and consumer choice, making PPOs popular among individuals who value the ability to choose their healthcare providers while still benefiting from negotiated lower rates with networked professionals.

In contrast, the other options offered are not related to PPO plans within the context of health insurance. For instance, payment for pre-existing operations does not correspond to the concept of a PPO, and public health organizations are government entities focused on population health rather than individual insurance. Similarly, "personal provider option" does not accurately describe the structure or function of a PPO.