How do Health Insurance Provider Networks Work?

A health insurance provider network is a list of doctors, health care providers, and hospitals that are contracted to a specific health insurance plan (PPO, POS, HMO or EPO). In these plans, the insurance company creates an entire list of doctors and facilities from which you have to choose. When you go to the doctor, you want to stay within your provider network to keep medical costs down.

Health plans work to ensure that consumers have access to high-quality, effective care. Consumers benefit from peace of mind when receiving in-network care because it assures the provider meets quality care standards and has lower cost sharing and out-of-pocket costs.

So, how do these provider networks work?

To stay competitive, health insurance plans must have a diverse list of providers and hospitals within their networks. To become a part of a network, a provider must have a contract with the health insurance company. This agreement usually gives the doctors and other providers a steady stream of patients and offers the health insurance companies service at reduced rates. A health insurance company usually determines who it contracts with based on what the provider’s discount is and how available the provider’s services are to the company’s customers.1

How do I know which provider network to choose?

When you go to select a health insurance plan, check to see which doctors and hospitals are listed in their provider network. If you have a doctor you love and want to stay with them, make sure that they are a part of the provider network when you go to select an insurance plan. If they are not listed in the provider network, you may want to consider a different insurance policy or be comfortable with finding a new doctor.

Depending on the type of plan you choose, your care may be covered only when you see a network provider. You may have to pay more, and/or get a referral if you choose to get care from a provider who isn’t in your plan’s network so make sure you fully understand who’s covered and who’s not.

Health Insurance Provider Networks Include:

Preferred Provider Organizations (PPOs)

  • PPOs give you the choice of getting care from in network or out-of-network providers. You pay less if you use providers that belong to the plan’s network. You’ll pay more if you use doctors, providers, and hospitals outside of the network, and you may have higher out-of-pocket costs for services. If you have a PPO plan, you can visit any doctor without getting a referral. 2

Point-of-Service (POS) Plans

  • POS plans let you get medical care from both in-network and out-of-network providers. If you have a POS plan, you’ll choose a primary doctor from a list of participating providers. Your primary doctor can refer you to other network providers when needed. If you want to visit an out-of-network provider, you’ll also need a referral and you may pay higher out-of-pocket costs. 2

Health Maintenance Organizations (HMOs)

  • HMOs usually limit coverage to care from providers who work for or contract with the HMO. An HMO generally won’t cover or has limited coverage for out-of-network care except in an emergency. If you use a doctor or facility that isn’t in the HMO’s network, you may have to pay the full cost of the services you get. HMO members usually have a primary care doctor and must get referrals to see specialists. 2

Exclusive Provider Organizations (EPOs)

  • EPOs generally limit coverage to care from providers in the EPO’s network (except in an emergency). 2

All plans are required to have provider networks with enough types of providers to ensure that all members can get the level of health care they need, when needed.

Have more questions about provider networks? Give us a call or visit our website to learn more.


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