If an insured under a Preferred Provider Organization (PPO) plan chooses a physician who is not a PPO provider, what will occur?

When an insured individual under a Preferred Provider Organization (PPO) plan chooses a physician who is not part of the PPO network, the arrangement typically results in the PPO covering reduced benefits for that service. This design encourages members to utilize in-network providers, who have contracted rates with the insurance company. By doing so, the insurer is able to manage costs effectively while also offering the insured a wider array of choices.

Choosing an out-of-network provider often leads to higher out-of-pocket expenses for the insured compared to using in-network providers. The PPO will still provide some level of coverage, ensuring that the insured is not entirely left without any financial support for care received, but this will be at a lower benefit level.

The other options do not accurately reflect how PPO plans generally operate. For example, the PPO covering full benefits would not motivate members to use cost-saving in-network providers. Similarly, covering none of the costs would impose an undue burden on members who need care. Lastly, placing the entire financial responsibility on the insured would typically not be the case, as most PPOs still offer some level of coverage for out-of-network services. Thus, the choice of reduced benefits aligns best with the operational structure of PPO plans.