Don't Buy Health Insurance Without Checking Network

Armen Hareyan's picture

More and more consumers are shopping online for individual and family health insurance trying to find the most affordable plan. As a result, many buying decisions are mistakenly made solely on the basis of cost and benefit design. Ignoring the Insurance Company's hospital and physician network can adversely affect the quality of care and the cost for that care.

Not all health insurance provider networks are the same.


Once a prospective buyer thinks they have found the medical insurance plan that is right for them, they need to take a look at the network. Most online health insurance quote sites have a link next to each plan that allows you to search the network directory. Make sure your Primary Care Physician is there as well as any Specialists that you or a family member sees on a regular basis. Some plans such as HMOs require you to select a Primary Care Physician from their network to act as a gatekeeper to other levels of care. You will also want to look at which Hospitals are in the network near where you live. Except for very rural areas, there should be a network hospital within 10 miles of your home and work locations. You should also make sure that the hospitals are in network, where you're Primary Care Physician and any Specialists you see have admitting privileges.

Access is not the only thing to look for in a network. While two Insurance Companies may have networks in your area with all of the same hospitals and most of the same doctors, the level of discount negotiated by each Company with those providers may be very different. In some cases the difference can be 30% or more. This difference, can impact your out of pocket costs. As an example, suppose you live in Atlanta Georgia and purchased family health insurance with a $2,500 deductible. You take your daughter with her sprained knee to your family doctor. After examining her, he bills your insurance company an office charge of $110. Since you have not yet satisfied your deductible, you're responsible to pay this office charge less the discount your doctor agreed to accept. Company A negotiated a discount of 70% while Company B's discount is only 45%. So you pay $33 (based on a 70% discount) if your health coverage is with Company A or $60 if your bought from Company B. This represents a savings of $27. Suppose after examining your daughter the doctor says she has ligament damage and will need surgery. The surgeon bills your health insurance company $1500. Assuming the same discount levels as in the above example, the difference in your out of pocket costs would be $375.

When looking to buy health insurance online, always call the toll free number on that site to speak with an experienced agent. They can answer any questions you have, help you understand insurance terminology and tell you which Insurance Companies in your area have the overall deepest discounts.

Written by Robert McMackin