When you’re navigating health insurance, there are various things you want to learn before you select a company. Understanding what “network” is all about is one thing you’ll definitely want to learn more about. A health insurance network is essentially a grouping of health care providers, facilities, and hospitals that have created a contract or agreement with a particular insurance company to provide medical care at reduced or discounted costs to their members.

The insurance company contracts with providers and facilities, like:

  • Outpatient surgery centers
  • Primary doctors and specialists
  • X-ray centers
  • Home healthcare, like CNAs or nurses
  • Providers of medical equipment
  • Hospice providers
  • Lab facilities
  • Specialties like chiropractors or physical therapists

The networking with such providers assures that the insurance member is getting quality care from a physician or facility that meets the required standards of the health insurance company. It also means that the providers and facilities agree to offer a reduced or discounted rate for the care they provide. 

Savings From Using Network Providers

When a physician or facility contracts with a health insurance company, it saves you, the member, money. For example, let’s say a physician charges $400 for a particular service. But let’s say they contract with an insurance company that will only approve $300 for that service.  Because they are considered in-network, the member of that insurance company will only have to pay the lower cost – $300. So, essentially, going to a healthcare provider in-network saves members money. 

Should you choose to see a provider that is not-in-network, you’ll be billed for the higher cost, with your insurance company only paying for what they stated they would approve. You’ll be responsible for paying the difference. 

What’s The Difference Between HMO And PPO?

It’s important to learn how HMO and PPO plans work, so you’ll know how to go about using in-network or out-of-network providers. If your insurance plan is an HMO plan, if you decide to go to an out-of-network provider, you’re responsible for the total cost of the visit. They don’t pay anything. 

However, if your plan is a PPO plan, your insurance company will pay a portion of the total cost if you see an out-of-network provider. For example, let’s say you see an in-network provider and your insurance company agrees to pay 70%, leaving you with having to pay 30%.  If you decide to go to an out-of-network provider instead, your insurance company likely agreed to pay a lower percentage, such as 50%, leaving you responsible for 50%. 

So, as you can see, it’s important to understand the difference between PPO and HMO when selecting an insurance provider. In addition, you should always check to see if they healthcare provider you select to go to is an in-network or out-of-network provider. 

Finding In-Network Providers

Most healthcare insurance companies give you online access to where you can look for in-network providers.  You can also call your insurance company directly and ask them to help you find an in-network provider or facility. That’s not saying you can’t see someone out-of-network; just be aware that it will probably cost you more money. It’s wise to find out ahead of time who is in-network and who is not, as this can save you money.

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