What are Networks?
When we are talking about health insurance, a Network is a lot like a school zone. For many counties and cities, where you choose to live determines what schools you can and can’t go to. Likewise, a Health Insurance Plan is “zoned” for certain hospitals and doctors. Just like you can’t send your kids to a school you’re not zoned for without paying the extra fee, you cannot go to a hospital or doctor that your health insurance plan is not zoned for without paying more than usual.
Not all Health Insurance has the same Types of Networks
If you’ve ever had health insurance through your work, you probably noticed that you got better coverage when you went to in network care as opposed to out of network care. Most group health care plans have what you call a PPO Network, and this is their main feature; that you can go outside of the network and still get coverage, but it will cost more than in network care. With these types of networks, going to care that is in the network will always have the better price.
In Tennessee, if you buy a plan from the Marketplace (an individual and family plan) it will have an EPO Network, which means you can only get coverage at in network providers.
Networks are created by each insurance company. Let’s use Blue Cross Blue Shield as an example since they’re a well-known name. Hospitals and Doctors will decide whether they want to be a part of Blue Cross Blue Shield’s network. To understand how this plays out practically, let’s use an scenario. Sarah has a Blue Cross Blue Shield insurance plan which she bought from the marketplace. She then decides to go to the doctor but finds out that the doctor does not accept her Blue Cross Blue Shield insurance. This doctor is what we call “out of Network” which means Sarah cannot receive any of the benefits her health insurance plan offers. Sarah could pay for her medical needs out of her own pocket, but she cannot afford to do that, so she instead decides to go to a doctor who is in Network and receives the medical attention which is covered by her Health Insurance. (This is also a great example of why it’s important to confirm that your doctors are in network before you purchase a Health Insurance plan. If you need help with this or have any questions, feel free to reach out to us here.) If you want to know more about how you and your insurance pays for medical costs, go to this blog post and scroll to the bottom.
What about in emergency situations?
We talked about how if you go to a doctor that does not accept your insurance, you have to pay for the services you receive. So, what if you are in an emergency and you go to the nearest ER? Will you get stuck with an outrageous medical bill that you cannot afford? Thankfully, the answer is a big fat NO. If you are in an emergency, get the help you need at the nearest location because your insurance will pay for out of network costs in emergency situations. But what constitutes an emergency? The rule of thumb is that if you could reasonably believe that you need immediate medical attention, then you can go to a hospital that is out of network. Broken or sprained bones, serious pain, inability to breathe, and many other conditions could all be considered emergencies. What if you go to an out of network hospital because you have extreme pain in your chest and believe you’re having a heart attack, but it turns out to be heartburn? The insurance will cover that even though it’s a false alarm because you had reason to believe that life or limb was a risk. (https://www.healthcare.gov/using-marketplace-coverage/getting-emergency-care/)
Choosing the right Network
Remember how I said that networks are made by the Insurance companies? This means that each insurance company has a different network. One insurance company might have your doctor or other healthcare providers in the network while others do not. For many people, looking at the networks of the different health insurance carriers is the determining factor in which Carrier they will buy from.
More on PPOs
PPO stands for Preferred Provider Organization and is a type of network of hospitals and doctors. It costs less when you see a doctor in the PPO network, but you still have the option of seeing a doctor out of network. However, if you choose to see a doctor or seek care outside of the PPO network it will be more expensive for you. This out of network option is not available with plans that use an EPO or HMO network. You also do not need to choose a Primary Care Physician (PCP) and you do not need a referral to see a specialist or other doctors in your network. A PPO network offers more freedom and flexibility but at a higher cost.
What is an HMO?
HMO stands for Health Maintenance Organization and is a type of network of hospitals and doctors. With an HMO plan you will NOT be covered for out-of-network care, only in network care (except in emergency situations). This limitation means that plans that use an HMO network will cost less. You will also be required to pick a Primary Care Physician (PCP) and on most HMO plans you will need a referral from your PCP to see a specialist. Historically all HMO plans required that you receive a referral from your PCP but recently some HMO plans have taken away that rule so you will have to check your specific plan to see what yours requires. In Tennessee, all marketplace plans do not have HMO networks but rather, they use what’s called an EPO network.
More on EPOs
EPO stands for Exclusive Provider Organization and is a type of network of hospitals and doctors. EPO networks are going to share most of the characteristics of an HMO but with a few exceptions. Like HMOs, EPO networks do not cover out-of-network care unless it is an emergency, meaning that you will have to stay in the network. This limitation is what helps EPO plans to be more affordable than a PPO. Many EPO plans will require you to choose a PCP but unlike HMOs, EPOs generally do not require you to have a referral to see a specialist, a feature that allows for more convenience and control. All the plans in Tennessee use EPO networks and only a few of them require you to have a referral to see a specialist.