Which statement about PPO plans is true?

• A. HMO requires assignment of a PCP
• B. PPO typically requires a deductible and coinsurance
• C. PPO has no out-of-network coverage
• D. HMO does not require authorization

Answer: (B)

PPO plans are built around flexible cost sharing and provider choice. A common arrangement is that you have a deductible you must pay before the plan starts sharing costs, and after meeting that deductible, you pay coinsurance—a percentage of the cost of covered services—while the insurer pays the rest. This structure applies to many PPOs, making it the best matching statement.

PPOs also let you see out-of-network providers and still have some coverage, though you’ll pay more out of pocket than you would with in-network care. That contrasts with the idea that there’s no out-of-network coverage at all. While PPOs often offer the option to go out of network, the costs are higher, and the specifics can vary.

Statements describing HMOs—such as requiring a primary care physician to coordinate care or needing referrals for many services—don’t describe PPO plans. And while HMOs commonly require authorization and PCP coordination, that isn’t a defining feature of PPOs.

So the statement about deductibles and coinsurance best captures the typical cost-sharing structure of PPO plans.