Insurance

In Network vs Out Of Network Medical Insurance Coverage

Medical insurance coverage can be confusing, and calling your provider’s customer support line may not be much help unless you understand some of the basic languages. One such topic that confuses many people is in network coverage compared to out of network coverage. It’s important to understand the difference, or you could end up paying much more for health care than you might have expected.

What Does In Network vs Out Of Network Mean?

Let’s start by defining what in network vs out of network means:

Your medical insurance company has negotiated a relationship with certain health care providers in which both parties benefit. The health care providers agree to provide services at certain costs. In exchange, by listing the health care provider as being in network with lower cost of services, the insurance company drives more business to them.

If a health care provider is out of network, your insurance company has no special relationship with them. You will pay full price for their services, and your insurance coverage on the bill is usually less.

In Network vs Out of Network Deductible

A deductible is an amount you will pay out of your pocket before insurance will pay for any of your bill. Your in-network deductible can be lower than your out of network deductible. Your coverage for in-network could also be better than out of network. In my case, my in-network and out of network deductibles are the same, but my coverage is not. For many services, once my deductible is met I only pay 25% of negotiated rates when in-network, but pay 45% of full price out of network.

In Network Vs Out Of Network Out Of Pocket Maximum

Insurance policies usually have an out of pocket maximum value that limits how much a person will pay out of pocket total annually. If you reach your out of pocket maximum, the insurance company will pay 100% of covered services. As with the deductible, the out of pocket maximum could be different for in network coverage, or out of network coverage. For example, my in network out of pocket maximum is $6700, but my out of network pocket maximum is $15,000.

It’s important to understand the difference between your in-network and out of network coverage. Using the basic understanding of the terms, and applying them to the coverage information in your policy you can then calculate how much a medical service is going to cost you out of your pocket.

How about you, Clever Friends, do you know what the difference is between the in-network and out of network coverage for your medical insurance policy?