Understanding health insurance terminology can be challenging, and one of the most common areas of confusion is the concept of “out-of-network” services. This term plays a key role in determining your medical expenses and the healthcare providers you can access. Whether you have an individual health insurance policy or coverage for your family, it’s essential to understand how out-of-network services work—and how they can significantly impact your overall healthcare costs.
What does out-of-network in health insurance mean?
When you buy a health insurance policy, your insurer usually has a list of approved healthcare providers. These approved doctors, specialists, hospitals and clinics are called “in-network” providers. They have agreed to provide medical services at discounted rates for policyholders.
On the other hand, out-of-network means a doctor or facility is not on that approved list. If you are offered care from an out-of-network provider, your insurance may not cover the full cost or may not cover it at all, leaving you to pay more out of your own pocket.
Why does out-of-network care cost more?
Out-of-network care usually costs more because your insurance provider hasn’t agreed on discounted rates with those healthcare professionals. Without this agreement, providers can charge their full price for services.
What's the difference between in-network and out-of-network in health insurance?
The key difference lies in cost and coverage. In-network providers often have a contract with your insurance company to charge lower fees. This means your insurer pays more of the bill, and you pay less.
Out-of-network providers, however, don’t have such contracts. This often results in:
- Higher co-pays or co-insurance
- Larger medical bills
- Potentially no coverage for certain services
When selecting a health insurance policy for family, it’s wise to check the network size and availability of in-network providers in your area. A larger network gives your family more options for affordable care.
Why would someone choose to use an out-of-network provider?
Despite the higher costs, some people still choose out-of-network providers. Reasons may include:
- A specific doctor or hospital with a strong reputation
- Urgent medical needs while travelling or living away from home
- Limited availability of specialists in the insurance network
Conclusion
Knowing what “out-of-network” means in your health insurance can help you make better choices for your healthcare. This is quite important if you have or are planning to buy a family health insurance policy. Being aware of the difference between in-network and out-of-network care and the costs involved might save your family from unexpected medical bills and ensure access to quality treatment when needed.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It is not intended as a substitute for professional advice, diagnosis or treatment. Please consult a certified medical and/or nutrition professional for any questions. Relying on any information provided in this blog is solely at your own risk, and ICICI Lombard is not responsible for any effects or consequences resulting from the use of the information shared.