A managed care organization of doctors, hospitals, and other providers who have an agreement with an insurer to provide health care at reduced rates to subscribers. PPO clients do not pay deductibles when using the preferred providers, but can use other providers and pay a higher co-payment as well as a deductible.

• A. Health Maintenance Organization (HMO)
• B. Preffered Provider Organization (PPO)
• C. Private health insurance
• D. Affordable Care Act

Answer: (B)

This question is testing your understanding of a Preferred Provider Organization. A PPO is a managed care arrangement where a network of doctors, hospitals, and other providers has agreed with the insurer to deliver care at discounted rates to subscribers. The key idea is the network contract that lowers costs for services when you stay with preferred providers. At the same time, you have the flexibility to use out-of-network providers, but you’ll face higher costs, such as higher copayments and a deductible.

This setup matches the description given: reduced rates through network providers with the option to go outside the network at greater expense. In contrast, an HMO typically restricts out-of-network care more strictly and emphasizes in-network care with referrals; private health insurance is a broad category and doesn’t specify this network-based pricing structure; and the Affordable Care Act is a law, not a specific plan type.