Final answer:
PPOs give patients the flexibility to use non-PPO providers in exchange for higher out-of-pocket expenses such as increased deductibles. This flexibility offers patients a wider choice of healthcare providers but at an extra cost when stepping outside the PPO network.
Step-by-step explanation:
Most preferred provider organizations (PPOs) are open-ended plans that allow patients to use non-PPO providers in exchange for higher out-of-pocket expenses. Unlike health maintenance organizations (HMOs) that require patients to use healthcare providers within a specific network, PPOs offer more flexibility at the cost of increased expenses for the insured when they choose to go outside of the PPO network. These extra costs come in the form of higher deductibles, copayments, or coinsurance fees.
An insurance deductible is the amount that policyholders must pay out of their own pocket before the insurance coverage begins to pay. Therefore, the correct answer to the student's question is: a. higher out-of-pocket expenses, which often come from a higher deductible when using non-PPO providers.