Life & Health Insurance Exam (National Portion)Policy Provisions, Options, and RidersHard
A PPO plan member is considering visiting an out-of-network specialist. Which of the following is the most likely consequence for the plan member?
- AThe plan member must obtain a referral from their primary care physician for coverage.
- BThe plan member will receive the same level of benefits as an in-network visit.
- CThe PPO plan will not cover any portion of the visit.
- DThe plan member will pay a higher coinsurance or deductible, but some coverage will apply.
Show answer & explanationAnswer & explanation
Correct answer: D. The plan member will pay a higher coinsurance or deductible, but some coverage will apply.
PPO (Preferred Provider Organization) plans offer more flexibility than HMOs. While they encourage members to use in-network providers through lower costs, they typically still offer some coverage for out-of-network services. However, this coverage usually comes with higher out-of-pocket costs for the member, such as a higher deductible, higher coinsurance percentage, or both.
Why the other options are wrong
- A. PPOs typically do not require referrals for specialists, even in-network, which is a characteristic of HMOs.
- B. In-network care always provides the highest level of benefits and lowest out-of-pocket costs in a PPO.
- C. PPO plans generally offer some level of out-of-network coverage, unlike some HMOs.
PPO Out-of-Network Coverage
PPOs provide coverage for services from providers outside their network, but at a higher cost to the plan member.
- Higher deductibles and/or coinsurance
- No referral typically needed
- Still offers some flexibility and choice
Memory trick: PPO FLEX, HMO NO