Final answer:
Staying within a PPO network means you will spend less money and deal with less paperwork. Deductibles and copayments are reasons for lower expenses and act as a form of cost sharing that prevents moral hazard.
Step-by-step explanation:
For PPO, staying within the network means less money coming out of your pocket and less paperwork. This is because when you stay within the network of your Preferred Provider Organization (PPO), the insurance company has already negotiated rates with the providers, which translates to lower costs in the form of deductibles and copayments for you. Furthermore, by adhering to the network, you minimize the need for extensive paperwork that is often required when seeing out-of-network providers.
Moderate deductibles and copayments are important forms of cost sharing that discourage moral hazard; people consume about one-third less in medical care than those with complete insurance who do not have out-of-pocket costs. These out-of-pocket expenses associated with PPO plans can include a monthly fee, deductible charges, and copayments.