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How to pick a provider network

Deciphering the alphabet soup of provider networks

Enrolling in a health plan can be complicated, whether it’s through your employer or the federal marketplace. Understanding and evaluating multiple plan types and cost structures can quickly become overwhelming. Here is basic breakdown of the provider network options likely available to you.

First, what is a provider network?

A provider network is a list of physicians, specialists and hospitals that have contracted rates with your insurance company. Those providers are “in-network.” Doctors and other clinicians without contracts are “out-of-network.”

Even if a doctor or hospital is out-of-network, your insurance company may cover part of your care, or you may be on the hook for the bill yourself. It all depends on the type of plan you have.

Types of provider networks 

1. PPO (Preferred provider organization):
You can see both in- and out-of-network providers, but you pay less in-network and pay more out-of-network.
You will not need a referral to see an out-of-network doctor or specialists.
Higher premiums and a deductible are likely.

2. POS (Point of service): 
You can see both in- and out-of-network providers.
You will need referrals to see in-network specialists as well as out-of-network providers, which may cost more.
These networks are popular on the insurance exchange.

3. HMO (Health maintenance organization):
Coverage is limited to in-network providers and based around a primary care doctor.
You will need referrals to see in-network specialists, and If you go out-of-network, you may have to pay the full cost of services.
Typically, these plans have lower copays and may not have a deductible.

4. EPO (Exclusive provider organization):
You don’t need a primary care physician, and you don’t need referrals to see an in-network specialist.
You will have a limited network of providers, and out-of-network care is not covered.
These plans generally have lower copays and premiums, and may not have a deductible.

A note on emergencies: 

Insurers are required to cover emergency care from out-of-network hospitals or emergencies. You will still have to pay your normal co-pay or co-insurance, but your insurer can’t require you to obtain prior approval in an emergency situation. However, though time is certainly of the essence, think carefully about whether your situation could be handled at an urgent care center, especially if you have an HMO or EPO. If your insurer thinks your case was not an emergency, you may have to pay for the care out of pocket. For more on avoiding unexpected medical bills, check out “How to avoid surprise medical bills.”

If you like this post, you may also like “Four steps for picking the right plan during open enrollment.”

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