The term PPO is actually short for Preferred Provider Organization. The purpose of the organization is to contract with doctors, hospitals, and other health professionals. The PPO offers the participant a choice of healthcare professionals to go to at reduced prices, which they have negotiated on their behalf. If you decide to go outside of their network of health professionals, a higher out of pocket expense of co-insurance and a separate deductible may apply. The extra expense is to prevent too much utilization by participants. The PPO carrier wants to prevent abuse on the parts on the participant and healthcare provider.

Many people prefer PPO over HMO Plans. HMO plans are usually more restrictive than the PPO. When you chose a HMO, you may only go to a specialist with your gatekeeper's permission. This would not be your normal case for a PPO, if you know beforehand that this procedure or surgery is covered.

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