Final answer:
A Preferred Provider Organization (PPO) is the health insurance plan that offers more coverage for in-network healthcare services and less for out-of-network, providing flexibility and a wide choice of providers to its members.
Step-by-step explanation:
The health insurance plan that covers more percentage in-network and less percentage out-of-network, and has a network of contracted healthcare providers offering services at reduced costs is typically a Preferred Provider Organization (PPO). A PPO plan allows members to visit any health care provider in their network without a primary care physician referral. However, it provides more coverage for services rendered by in-network providers compared to out-of-network providers. Different from HMOs (Health Maintenance Organizations) that require members to choose a primary care physician, PPOs offer more flexibility in terms of seeing providers outside of the network, but at a higher out-of-pocket cost.
Other health financing systems include the fee-for-service and HMO. In a fee-for-service system, providers are paid for each service they perform, while in HMOs, providers are paid a fixed amount per person enrolled, regardless of the number of services provided. Insurance markets may also face adversity due to adverse selection, where there is an asymmetry of information between the insurance company and the insurance buyers.