What is a health insurance network?

What exactly is a health insurance network, and why does my health plan want me to use theirs? Find out what the benefits are to using a health insurance network.

A health insurance network is a group of doctors, hospitals and clinics that have agreed to provide plan members with health care services. When you enroll in an insurance plan with a network, in order to get the best value from your plan you must use those doctors and hospitals for your health care needs. If you receive care outside of your network (other than in an emergency) you could end up paying out of pocket for most of those costs.

The size of the network depends on the insurance plan you choose. Usually, the larger the network, the higher your monthly premium will be. Many private Medicare plans, like Medicare Advantage plans, have limited networks, and this can mean lower premiums for you. But it’s not all about the costs. Limited networks make a lot of sense for meeting most people’s health care needs.

Can a limited health insurance network actually be good for you?

The short answer is yes. And here’s why.

1. Networks include high quality doctors and hospitals

Health insurance companies carefully choose the doctors, clinics and hospitals (providers) in their networks. They want to make sure providers are performing up to their quality standards. One reason for this is that Medicare Advantage plans are rated based on the performance of their doctors and hospitals. 

2. More coordination and efficiency

Limited networks are better able to provide coordinated care to make sure your services, treatments and medications all work together and that you’re not paying for services you don’t need.

3. Lower premiums

Networks help control health care costs by agreeing to set limits on how much they charge for certain procedures. By partnering with doctors and hospitals to control costs, insurance companies are better positioned to offer plans with lower premiums.

Once people learn about the benefits of a health insurance network, they usually have a few questions.

Is my doctor in the network?

If you are really concerned about keeping the same doctor, there’s one simple way to make sure that he or she is in your network. Check the plan’s list of providers. Every Medicare Advantage plan lists their providers online, and most have a provider search tool. If in doubt, call the plan’s member services department.

What if I need emergency care outside of my network?

All Medicare Advantage plans cover out-of-network care for emergencies or urgent care. Some plans may allow you to get specialized services out-of-network for a higher cost. Look for a Medicare Advantage Preferred Provider Organization (PPO) plan or a Health Maintenance Organization (HMO) with a point-of-service (POS) option if you want coverage outside the network.

For more information on the differences between Medicare plans, visit medicare.gov/ or find your State Health Insurance Assistance Program which offers free, independent counseling services and local workshops to help you make informed health care benefit decisions.

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