You may be asking yourself what exactly a network plan is? For one thing, the terminology can be confusing. It is easy to be lost with the details. However, it isn’t as complicated as it sounds. A network plan is defined as a health plan that hands out contracts to numerous health-related services such as doctors, hospitals, and even pharmacies. In turn, the health plan provides these services to policyholders at a discounted rate.
How Does A Provider Network Work?
Before a provider can have their network up and running they must first establish a contract with the health insurance company. Once the contract has been ratified, doctors and providers can start providing policyholders the insurance companies’ services at a discount price. As a result, anyone that utilizes the services offered by a network plan will often pay far less as opposed to fee-for-service plans.
When choosing a provider, it is important for health insurance companies to analyze several factors which will affect their overall decision-making process. For instance, an insurance company will consider the discount rates and services offered by the provider before finalizing a contract deal. In addition, a provider’s board certification and educational credentials are also considered before inclusion into the network. After the contracts have been finalized, the policyholder has to abide by the rules dictated by their insurance plan when they join the network.
Differences Between In-Network and Out-of-Network
An in-network health provider allows for doctors, hospitals, pharmacies, and specialists to come to an agreement with a health insurance company in order to offer their services at a discounted price. Policyholders that subscribe to this type of network will pay far less than they would in an out-of-network plan. It is worth mentioning that despite the low rates, the policyholder is limited in the number of providers they can visit.
In contrast to an in-network plan, out-of-network health providers have not settled on an agreement with an insurance company to offer care. Given these circumstances, a policyholder will often pay more out-of-pocket when opting to use an out-of-network plan in comparison to an in-network plan.
What Are The Different Network Types?
As of right now, there are dozens of different network provider types for a policyholder to choose from. But for the sake of simplicity, we will be focusing on the four main ones. These network plans are broken into:
Health Maintenance Organization
A health maintenance organization (HMO) is a health insurance plan that focuses on offering a network of select providers to its policyholders. In this type of plan, one is required to choose a primary care provider to not only attend to their general needs but to also give you a referral to see a specialist.
So long as the policyholder utilizes the services within an HMO plan, their costs will be at a predetermined rate. In an HMO, it is advised not to rely on an out-of-network service since those fees are not covered by the provider. As a result, you would pay more out-of-pocket for services outside of the network.
Point of Service
Things are not much different when exploring what a point of service plan (POS) is. In a POS provider network, much like an HMO, you are required to choose a PCP to be able to see specialists within the network. Similarly, the costs of service are much lower when utilizing the services and providers that belong to the network.
Despite the similarities with an HMO, a POS plan differentiates itself by offering some degree of out-of-network coverage to policyholders through obtaining a referral from a specialist.
Preferred Provider Network
Preferred provider organizations (PPO) are the most popular type of health insurance policy plan available in the marketplace. PPOs allow for policyholders to visit any provider or health facility in the network. Not to mention, in this type of plan, one is not required to choose a primary care physician, nor do they need a referral to visit a specialist.
A PPO, while being different from some of the other networks, does share similar features, specifically on how policyholders save money when using in-network providers. At the same time, PPOs also allow you to seek out-of-network services that will at least be partially covered by the insurance plan.
Exclusive Provider Network
Finally, we have an exclusive provider organization (EPO) network. An EPO is a type of managed care plan in which a policyholder is only allowed to use the services and facilities provided by the health insurance company. In essence, EPOs offer no out-of-network benefits, and by resorting to some of these services, it is understood that you will be paying 100% of the out-of-pocket costs.
Fortunately, prices in an EPO network are generally low coupled with the fact that a referral is not required in order to see a specialist.
Where to Shop For These Network Plans
In the marketplace, you’ll be able to compare and contrast price rates alongside the services that each network offers to the consumer. Both the availability and eligibility of the insurance plan you want will vary depending on the state you reside in. Check out our online form to get a personalized quote and compare your plan options.
Which One Should You Choose?
Choosing the right network plan for you is quite complicated, and that decision will be influenced by several factors. For example, do you prefer solely relying on in-network providers? Is it important for you to be able to choose your primary care provider? Or do you simply want a low-cost network without having to worry about obtaining a referral to see a specialist?
All of these things are questions that you should be asking yourself before finally purchasing a specific network plan. Price and availability will most certainly play a key role in your final decision, so it is crucial that you weigh out the pros and cons of each network. Some network plans may work better for others, some might just be optimal only for you.
In the end, these are decisions that will affect the fate of your future health insurance coverage. There’s no problem with taking your time in order to choose the right one. What matters most is how much benefit it can bring you at the end of the day. Good luck!
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