Which statement differentiates a Preferred Provider Organization (PPO) from an HMO in terms of network flexibility and costs?

• A. A PPO offers a larger or more flexible network with partial reimbursement for out-of-network care, no required gatekeeper, and typically higher premiums and cost-sharing than an HMO.
• B. A PPO uses a restricted network and requires a gatekeeper.
• C. A PPO requires referrals for all specialists and has no out-of-network coverage.
• D. A PPO provides catastrophic-only coverage with minimal benefits.

Answer: (B)

Network flexibility and cost structure distinguish PPOs from HMOs. A PPO typically offers a larger, more flexible network and allows you to see out-of-network providers with partial reimbursement, and there’s no required gatekeeper to approve visits. This freedom usually comes with higher premiums and greater cost-sharing. HMOs, on the other hand, use a more restricted network and require a primary care physician who acts as a gatekeeper; out-of-network care is limited or not covered, and premiums tend to be lower. So the statement describing a PPO as having a restricted network and a gatekeeper describes an HMO, not a PPO. The option that aligns with PPO characteristics is the one noting a larger network with out-of-network coverage and higher costs.