According to the Preferred Provider Agreement Act, what is the maximum payment difference percentage allowed for a health benefit plan with inadequate provider networks?

The correct answer is based on the provisions outlined in the Preferred Provider Agreement Act, which addresses the situation of health benefit plans that may have inadequate provider networks. Specifically, the law states that when a health benefit plan does not have sufficient providers within its network to meet the needs of its insured members, it allows for a maximum payment difference percentage. This percentage reflects the additional amounts that might be charged to the policyholder when utilizing out-of-network providers.

In this context, a maximum payment difference of 25% indicates that when insured individuals seek care outside of the network due to a lack of available providers, their plan can cover costs that are up to 25% higher than what would normally apply if adequate network providers were available. This helps to ensure that consumers have access to necessary medical care while also acknowledging the realities of network limitations.

By establishing this cap at 25%, the act aims to balance the interests of both the consumers — who might otherwise face significant out-of-pocket costs — and the insurance providers, by providing a structured approach to how much these additional costs can be. This sets a standard for the health insurance industry and promotes a fairer practice regarding payment differences when network inadequacies are present.

In contrast, options such as 15%,