Final answer:
The Preferred Provider Organization (PPO) is the health plan in which coverage for care received from a network provider is higher than care received from a non-network provider, offering a balance between flexibility and cost.
Step-by-step explanation:
The type of health plan where coverage for care received from a network provider pays more than care received from a non-network provider is the Preferred Provider Organization (PPO). PPO plans offer more flexibility when choosing a healthcare provider or facility. They allow you to see doctors and specialists without a referral, even outside the network, but with higher reimbursement if you use network providers. Health Maintenance Organizations (HMOs), by contrast, typically require policyholders to receive care from a network of designated providers for the highest level of coverage. In HMOs, out-of-network care is usually not covered unless it's an emergency.
Adverse selection can occur in insurance markets, a scenario where better-informed consumers of insurance disproportionally affect the insurer by purchasing plans that are more advantageous to their situation. This affects the risk pool and can increase costs for the insurer. PPOs, despite the higher costs associated with out-of-network care, offer a balance between the predictability of an HMO and the flexibility to choose providers.