Fewer options for out-of-network care

Preferred provider organization plans (known as PPOs) generally cover a bigger portion of the cost of medical care if a patient sees a doctor who is out-of-network (the major alternative, known as health maintenance organization plans -- or HMO plans -- often do not cover out-of-network medical expenses, except for emergency care). Understandably, many consumers prefer the breadth of choice that PPO plans offer compared to HMO plans. However, that choice comes at a financial cost, especially since out-of-network doctors can charge much higher prices. That financial cost would be seen in the monthly insurance premiums. When the financial difference is heavily subsidized (e.g. by an employer), healthcare consumers might choose either. On the health insurance exchanges, however, it appears that in many cases, not enough consumers are selecting PPO plans for insurers to find it worthwhile to continue offering the plans.

It's possible that people who shop on insurance marketplaces tend to be more price-sensitive than those who don't and as a result, PPO plans are less likely to survive in that context. Regardless, that PPO plans seem to be in decline on health insurance exchanges suggest that the industry itself is subject to change as healthcare consumers become more value-conscious. Perhaps at some point in the future, insurance plans that offer narrow provider networks will become more popular, forcing more providers to also compete on price.