Preferred provider organization (PPO) health insurance generally has a large network of contracted doctors that a patient may select. Patients may also choose to see doctors outside of their network, but they pay a higher copayment for appointments with these doctors. Because preferred provider organization health insurance doesn't require a referral from a primary care doctor, it is considered one of the most flexible types of health insurance.
The most common types of health insurance are preferred provider organization and health maintenance organization (HMO). In contrast with patients who have preferred provider organization health insurance, patients with a health maintenance organization plan must get a referral from a primary care doctor to see a specialist. These primary care doctors help to keep health insurance costs low by referring patients to specialists only when needed.
In exchange for the flexibility of a preferred provider organization health insurance plan, consumers generally pay higher premiums. It is common to pay a deductible and a low copayment when seeing doctors within the preferred provider organization network. Copayments for doctors outside of the network are often higher than those for doctors within the network.
By contrast, health maintenance organization health insurance often has a low premium and covers most or all of the cost of seeing doctors within a network. Consumers are often strongly encouraged to stay within their network, because health maintenance organization health insurance rarely covers doctors outside of the network.