What differentiates a PPO from an HMO?

The distinction between a Preferred Provider Organization (PPO) and a Health Maintenance Organization (HMO) primarily lies in the level of flexibility offered in choosing healthcare providers. PPOs allow members to select any healthcare provider, including specialists, without requiring a referral from a primary care physician. This freedom means that individuals can see out-of-network providers, although at a higher cost, which caters to those who value more options in their healthcare decisions.

In contrast, HMOs typically require members to choose a primary care physician who manages and coordinates all healthcare services, which includes obtaining referrals to see specialists. This limits flexibility but tends to result in lower overall costs and premiums for the insured.

Thus, the correct answer highlights the greater choice and flexibility associated with PPOs, making it distinct from how HMOs operate.