Medical Expense✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Compared with an HMO, a PPO generally offers its members:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A preferred provider organization is built on a contracted network of physicians and hospitals, but unlike an HMO it does not require a gatekeeper and it permits members to use out-of-network providers. That flexibility comes at a price: out-of-network care usually involves higher deductibles, coinsurance, and balance billing exposure because the plan reimburses at a lower level. Comparing the flexibility and cost trade-offs of HMO versus PPO designs is part of the individual plan-type coverage under AH-III.A.1a.
Why the other options are wrong
- B) Out-of-network care in a PPO costs the member more, not less, than in-network care.
- C) A mandatory gatekeeper for specialists is characteristic of an HMO, not a PPO.
- D) PPO members still pay premiums, deductibles, and copayments; there is no prepaid no-cost-sharing arrangement.
Memory hook
PPO = Pay more for freedom; HMO = cheaper, but play by gatekeeper rules.