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What does “in-network” health insurance mean?

Keep in mind...
  • Insurance companies make agreements for medical services to serve their clients
  • A health insurance network consists of medical professionals that agree to low prices
  • Insurance plans offers low prices when clients use their network’s services
  • Health insurance out-of-network services cost more or may not be covered at all depending on the type of coverage you have

Health plans try to deliver services to customers at low prices. They can charge less for premiums, deductibles, copays, and coinsurance when medical service prices are lower than the market rate. They get deep discounts from doctors and hospitals by offering a high volume of patients.

Networks must be adequate to cover a territory and an expected population of customers. They must be small enough to generate large customer volumes for the service providers.

When selecting health insurance, comparison shopping can help customers see the strengths and weaknesses of networks.

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The Network is Important

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The technology behind every plan is the network of medical services providers that cover the plan’s territory and the diverse population of beneficiaries. The current trends are towards more HMO type of plans with small networks.

The size and make-up of the network can restrict customer choices.

Customers pay more when they go to an out-of-network provider that they need or prefer due to restrictions in their own health insurance network.

Types of Managed Care

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The type of managed care affects the plan’s network. Some plans use narrow networks that limit customer choice. The plans that use outside network resources can add to the out-of-pocket costs that users will typically experience.

Check out the list below to learn about the types of health insurance managed care plans.

HMO is the Health Maintenance Organization. It uses narrow networks, high-volume services, and promotes prevention and wellness. The key is the primary care physician that delivers care and referrals to network resources. The HMO does not pay for outside-of-network services.

PPO is the Preferred Provider Organization. This type of network offers low prices for in-network providers but also pays some cost-sharing when users go outside to other providers. The PPO is more flexible and usually more expensive than the HMO.

EPO is the Exclusive Provider Organization. This form of care uses small networks and does not pay any cost sharing for outside resources. Users must pay the full fees and costs for going outside of the EPO network.

The EPO offers low prices and easy services with low copays and low coinsurance. All in-network expenses count towards the maximums and the point where the insurance pays the entire costs of a covered benefit.

POS is the point-of-service plan. This type of care uses a network and a primary care physician to make referrals. In-network resources usually have no deductibles, low copays, and low coinsurance.

The primary care physician can make referrals to outside resources. The insurance provides cost-sharing for outside referrals.

Without a referral, outside network services cost more. The plans may require a deductible and large copays and high levels of coinsurance.

FFFS is the fixed-fee-for-services plan. This approach does not use a narrow network; it uses a wide network of providers that accept the prices and terms offered by the insurance company. This approach restricts the service providers while the patient is free to pick and choose as they wish.

The Original Medicare is an FFFS system. Users can go to any doctor or hospital that accepts Medicare. The in-network group is so large for Original Medicare that most users do not feel restricted to a network, though, in fact, they are.

Network and the Individual Mandate

The individual mandate is the driver of health care plan selection. It is the legal requirement that everyone must get and keep health insurance or face a tax penalty.

The individual mandate requires qualified health plans with minimum essential content, substantial actuarial value, and an adequate network.

Networks Affect Costs

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Plan providers and insurance companies seek ways to cut costs, reduce consumer expenses, and improve profits. They use narrow networks to cut costs and improve profits. The consumer may benefit from slightly lower premiums and copays, but for many, the restrictions are costly.

The narrow networks can force consumers to go outside of the plan for faster service, better selection, or for services unavailable in a narrow network.

The CMS has come under criticism and decided to increase its review efforts for network adequacy. The costs of health insurance must include the use of needed medical services that are outside of the health plan network. Comparison shopping is the best way to find the true costs of health insurance.

In-Networks and Medicare

Medicare Advantage plans have the widely used managed care networks. The CMS reviews them annually before permitting them for sale to Medicare Advantage beneficiaries.

One can see the below-described contrast between Medicare and the Obamacare Marketplace.

  • The different result occurs when CMS finds a network to be inadequate.
  • The CMS requires a guarantee from the plan prior to approval.
  • The CMS requires plan providers to agree to pay up to the Original Medicare rate when filling out the network to serve clients.

The CMS Reviews Networks

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Medicare Advantage plan providers must present information to the Centers for Medicare and Medicaid concerning their networks. The CMS reviews the details of the networks and notes when they have been fully deployed or merely planned and ready for mobilization for Medicare Advantage.

Responding to criticism from the Government Accounting Office ( GAO), the CMS has beefed-up its oversight and enforcement procedures. They announced new and stronger efforts to ensure customer service levels.

Processing Claims

Paperwork is a difference in the outside network and in-network providers. Customers must often claim for reimbursement for spending money outside of the network. They must make a claim, and the insurance provider must process the claim. Claims processing can take many weeks.

The customer must keep records and file paperwork to initiate the process. The customize must add information as needed to get the claim processed.

Outside Expenses do not Make the Limit

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The limit on out-of-pocket expenses and deductibles was a major reform of the Affordable Care Act. Consumers could have the benefit of insurance paid coverage after they paid the limit from their pockets. This protection exists but many people fail to realize it only applies to the network based costs and expenses.

Consumer spending on outside resources does not count against the plan’s limit on deductibles or out-of-pocket expenses.

Without some caution, it is still possible to pile up a mountain of medical debt through out-of-pocket expenses. Out-of-network expenses do not move the user to the fully insurance-paid level of benefits.

Networks Determine Quality

 

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The use of networks is nearly everywhere in health insurance. Few plans offer the freedom to go anywhere without paying far more than when using in-network services. Indemnity plans give the greatest freedom of choice without a network.

In-network plans restrict the customer to using the network due to the costs of going outside the network.

Comparison shopping helps find the best fit for health insurance. The in-network advantages are important to holding down the costs of health insurance. There is no limit on outside network out-of-pocket expenses.

Comparison shopping can help find the best in-network insurance solution. Click here to compare online health insurance quotes for free!

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