What is the primary characteristic of preferred provider organizations (PPOs)?

The primary characteristic of preferred provider organizations (PPOs) is indeed the flexibility to use out-of-network providers at a higher cost. This feature distinguishes PPOs from other types of health insurance plans, like health maintenance organizations (HMOs), which typically require members to select a primary care physician and obtain referrals for specialist services, leading to more restricted choices.

PPOs allow members greater autonomy in choosing healthcare providers. While they encourage the use of in-network providers by offering lower out-of-pocket costs for such services, members still have the option to seek care from out-of-network providers. This flexibility appeals to many who value the independence of selecting specialists or specific healthcare facilities without the need for referrals. Consequently, the ability to access a wider range of providers, albeit often at a higher cost compared to in-network care, is a defining trait of the PPO model.