How Smaller Networks On Health Exchange Plans Will Hurt You

Network of DoctorsIf you’ve been following the news on Obamacare, you have likely heard about how many health insurance plans sold on the state exchanges have “small provider networks,” also known as “narrow networks.” What does that mean, and how does it affect your healthcare costs?

In-Network Providers vs. Out-of-Network Providers

Every health insurance plan has its own “provider network.” This is a list of doctors, laboratories, pharmacies, and other medical facilities that have contracted with the insurer to provide services to policyholders at a special, discounted rate, known as a “contracted rate.” The doctors, pharmacies, and facilities on this list are known as “in-network providers.” The contracted rate for these in-network providers includes your share of the cost—your deductible, copay, or coinsurance—plus your insurer’s share.

How Using an In-Network Provider Saves You Money

Doctor with piggybankAs an example, assume that your copay for a primary care physician visit is $20.00, while the contracted rate for a visit is $100.00. Your share of the contracted rate would be $20.00, and your insurer would pick up the remaining $80.00.

If you choose an “out-of-network provider”—a doctor or facility that is not in your insurer’s provider network—your costs could be substantially higher. An out-of-network provider is not bound to your insurer’s contracted rates; they can charge full market value, with no discount. Additionally, even if your insurer partially covers out-of-network care, your share of costs will usually be much higher than it would be in-network.

For example, while you may be responsible for only 20% of the cost of an MRI performed at an in-network facility, you could be responsible for 30% or more if you go out of network. Additionally, your insurer may make you fully responsible for the cost difference between the contracted rate and the out-of-network provider’s charge. Or your insurer may not cover out-of-network care at all, leaving you responsible for the full bill.

From a cost standpoint, it is always to your advantage to choose an in-network provider.

Obamacare Exchange Plans: If You Like Your Doctor, You May Not Be Able To Keep Your Doctor

In addition to the sticker shock many people are encountering when shopping on the Obamacare exchanges, they are also facing “doc shock.” In order to keep costs down while still complying with Obamacare mandates, many insurers on the exchanges have very small provider networks, sometimes much smaller than those found in pre-Obamacare plans. Additionally, some of these narrow networks exclude the top hospitals in the nation, such as the Mayo Clinic in Minnesota, Cedars-Sinai in Los Angeles, and a number of major children’s hospitals.

While proponents argue that narrow networks can be good for patients, ensuring continuity of care, many patients are worried that they will be stuck with inferior treatment options if they need specialized care for a serious illness.

Pediatrician with patientHow to Keep the Doctors & Hospitals You Like

There are ways to ensure that you purchase a plan that includes the doctors and facilities you want. If you are young and healthy, you can purchase a major medical plan prior to the end of 2013. If you are older or have a preexisting condition, your insurance options are not limited to the exchanges; you can purchase an off-exchange plan from a health insurance broker that will meet the Obamacare coverage mandate requirement. These plans usually have larger provider networks.

The professional insurance agents at Health-Life-Dental-Insurance.com are here to help you choose a plan that includes the in-network providers you want. Click here to get started online, or call 1-800-257-1723 to speak directly to an agent.