Illinois Health Insurance Practice Exam

Preferred Provider Organizations (PPO's) provide medical services at negotiated discounted rates and offer lower deductibles and co-insurance requirements to apply if the insured receives service from a hospital in network.

1. True

2. False

3. Partially true

4. Mostly false

The correct answer is: True

The statement is accurate. Preferred Provider Organizations (PPOs) are designed to offer more flexible healthcare options. They negotiate discounted rates with a network of preferred providers, which allows insured members to receive services at these reduced rates. Additionally, when insured individuals utilize in-network hospitals and providers, they benefit from lower deductibles and co-insurance levels, making healthcare more affordable. This structure encourages members to seek care from network providers while still allowing them the option to go outside the network, albeit at higher out-of-pocket costs. Thus, the answer aligns with the fundamental characteristics of how PPOs operate.