Understanding Your Health Insurance Network

Understanding Your Health Insurance Network

A health insurance provider network is a group of healthcare providers that have contracted with a health insurance carrier (via an HMO, EPO, PPO, or POS plan) to provide care at a discount and accept the discounted price as payment in full.

An example of a network provider is a surgeon who is compensated by the insurance company for performing a surgical procedure on your back. You may pay part of the bill and the insurance company pays the other part as long as the provider is in the insurance company’s network.

What is a Health Plan Network?

A health plan’s network includes healthcare providers like primary care physicians, specialty physicians, hospitals, urgent care clinics, labs, X-ray facilities, home healthcare companies, hospice, medical equipment providers, infusion centers, chiropractors, podiatrists, and same-day surgery centers.

Health insurance companies want you to use the providers in their network for two main reasons:

  • These providers have met the health plan’s quality standards.
  • They’ve agreed to accept a negotiated discount rate for their services, in trade for the patient volume they’ll receive by being part of the plan’s network.

Why Your Health Plan’s Network Is Important

You will pay lower copays and coinsurance when you get your care from an in-network provider, as compared to when you get your care from an out-of-network provider, and your maximum out-of-pocket costs will be capped at a lower level.

In fact, HMOs and EPOs generally won’t even pay for any care you receive from an out-of-network provider unless it’s an emergency situation. And even the less restrictive PPOs—which do pay for out-of-network care—commonly require you to pay 20% or 30% coinsurance for in-network providers versus 50% or 60% coinsurance for out-of-network providers.

And they tend to have higher deductibles and out-of-pocket maximums when you go outside the network. In some cases, they don’t limit out-of-pocket costs at all if you see an out-of-network provider (the ACA requires non-grandfathered health plans to limit out-of-pocket costs for essential health benefits, but only in-network; there’s no restriction on how high out-of-pocket costs can be if you go outside the network).

Copays and Billing

An in-network provider will bill your health plan directly, collecting only the copay or deductible amount from you at the time of services (for coinsurance, which is a percentage of the total amount—rather than a flat rate like the copay and deductible—it’s generally better to ask the provider to bill the insurance first, and then your bill will be determined based on a percentage of the negotiated rate that the carrier has with the provider).

However, an out-of-network provider might not file an insurance claim for you. In fact, many require that you pay the entire bill yourself and then submit a claim with your insurance company so that the insurance company can pay you back. That’s a lot of money upfront from you, and if there is a problem with the claim, you are the one who’s lost the money.

Contracted Rates

An in-network provider is not allowed to balance-bill you. They must accept the contracted rate—which will include your deductible, copay and/or coinsurance, as well as the portion of the claim, if any, that your insurer pays—as payment in full or they’ll be in violation of their contract with your health insurance company.

But since out-of-network providers don’t have any contract with your insurance company, those rules do not apply to them. In general, an out-of-network provider may charge you whatever their billed rate is, no matter what your health insurance company says is a reasonable and customary fee for that service.

Since your insurance company will only pay a percentage of the reasonable and customary fee (assuming your plan covers out-of-network care at all—many don’t), you will be on the hook for the entire rest of the bill with an out-of-network provider. Thus, an in-network provider is usually the best option.

Contact Insurance Enterprise for Group Health Insurance

If you have questions about group health insurance and need health insurance quotes, contact Insurance Enterprise at 888-350-6605. Speak to a licensed agent and find out more about how you can get an affordable health insurance plan.