Why Your Health Insurance Network is Important

It is always good to include a story or anecdote in an informational article like this one to make it more personal, more real. I don't want to make it seem like I am just pulling random ideas out of thin air for the sake of creating content and then trying to make an emotional impact on the reader. So I will share the reason for this article, but not right at the beginning.

I think most can agree that the current state of health care and health insurance in America leaves much to be desired for the average American. At the very least it is confusing to many. Why is health care so expensive? Why are healthcare plans so expensive? Why is this not covered? What the heck is a "max-out-of-pocket"? Why do I have such a high deductible? Why is my family doctor not in my network? Why is my family doctor in-network, but won't accept my insurance? The list goes on.

I recently helped a professional couple with their coverage and they told me directly they knew nothing about health insurance. When I say professional couple, I mean college graduates. One was the CEO of a company. Of course health insurance is not an elective on most campuses, but you would think that they would have come across some health insurance during their careers with various employers. And they had, but that does not mean they fully understood the coverage when they had it. This is not a derogatory comment on them, but to the complexity and confusion that surrounds the most common types of health insurance.

To be honest, if you asked me about my car insurance, I would flunk the exam horribly. I do not know exactly what my coverage is. I think I know what the deductible is ($500). I do at least know who the insurance is with. But, my friend (an insurance agent) pointed out to me that I have been driving around on state minimums for years. I had no idea. It's a big deal. Especially if I hit an expensive car or someone's house. I may not have enough coverage.

Shouldn't we as consumers be able to pick up our policy and read it and KNOW what we have without needing an interpreter? Yes, I believe we should. But, that is not always the case. In most states it is required that you are given a summary of the benefits along with all of the disclosures, such at waiting periods, limitations, exclusions. These items should clearly spell out the coverage. Consumers, for the most part, know what they want. The problem is that they can't always tell if it's what they want by reading the documents presented to them. So they may be left in a state of anxiety or doubt and are relying on the intelligence and truthfulness of the agent presenting the plan to them.

Now, I just want to say that health insurance is a complex contract. Insurance is regulated at the state level. Each state has it's own rules. So, an insurance company has to spell out exactly what they do and do not cover in each state where the policy is issued. When something is covered. How long you have to wait to have it covered. Where can you go to have it treated and so on.

One of the major components of a health insurance policies is the provider network. This is just where you can go to use your benefits and get the most out of your plan. You would think this was a simple part of your coverage to comprehend, but no. There are aspects to this that you would need to know before getting treated or having diagnostic work done to ensure you got everything you are entitled to under your policy and did not have to come out of pocket unnecessarily.

I am sure most of us understand the concept of in and out-of-network. Sometimes the insurance company owns the facilities outright and save a tremendous amount of resources by having you go to their own doctors and hospitals. However, most of the time doctors and facilities contract with the various insurance companies to deliver services at pre-negotiated rates to the insurance company's insured. This is how the insurance companies can control costs. If they know ahead of time what something will cost they can predict expenses and regulate premiums over a longer term and a larger area. If the insured public are running willy-nilly to any old provider charging whatever they want costs can run out of control.

So, it is important to know what and who is in-network under your insurance coverage. This could be as simple as checking a provider list or calling customer service at the insurance company. Then make a note of the hospitals in network along with doctors and call them, too! Especially if you have Medicare, Medicaid or a plan offered through the Marketplace (ACA). The type of coverage you have may determine if that provider will see you and that you get available benefits under your policy.

Knowing who and what is in-network near where you live is important. But, what happens when you travel outside of your service area? Such as out of your zip code, county or state. You can drive from one county to the next and there could be no in-network providers. There are plans like that here in Tennessee. One company offers certain plans in some counties and not in others. Yet they also offer a group plan with a statewide network that includes 25,000 providers.

So, here is where I get to the anecdote. I had some family members drive in from out of state to visit for a week last year. When they got here one of them was ill , very ill. When they did not get better after a couple days of rest, we thought it best they go to the hospital to get checked out. They did have health insurance. In fact with same company I mentioned that had a statewide plan here in Tennessee.

However, even though it was the same big company and the hospital they went to was a part of the company's statewide network it was still considered out-of-network for them. Yes, there are 25,000 providers in that company's network here in Tennessee, none of them in-network for them. After some distress they got out their insurance cards and made some of calls. They found out that there were benefits for them here, very limited benefits.

There were benefits for life threatening emergencies only and just up to a specific dollar amount. After that it was all on them. There was no limit to their financial liability. Their deductible and max-out-of pocket did not matter out-of-network. With some plans they could have had a higher out-of-network deductible and then it would have been 100% on the insurance company, but that was not the case.

So my family member got admitted and crossed their fingers. Luckily, the bill was not as over the top as it could have been, although they did easily used up all of the available out-of-network benefits. They would not have to sell their home and cash in their savings. Had there been a surgery involved or lots of imaging (MRIs, CT scans, etc) and testing they could have racked up a significantly larger bill during that week long stay in the hospital.

They got away with "just" owing several thousand dollars and worked out payments with the hospital. Sadly, their only other option would have been to make the 10 hour drive home so they would have all of their benefits available to them. But, it was risky considering the seriousness of the illness.

So this is just another lesson to each of us that we must know our coverage thoroughly. Whether it is health insurance, home owners, life, etc. We buy it for peace of mind and financial protection. But, the emotional upset we would experience when it does not do what we thought would be very intense. Not mention the potential loss of assets.

There is one more aspect to the "in-network, out-of-network" conundrum that I will address in a future article. For now break out that insurance policy and read it over. Call your agent if you can't find the information easily. They would be happy to help. If they are unreachable then call me. I will happily review your coverage with you and get your questions answered.

Thanks for paying attention through all of this. I hope that it was helpful.

Brian Pierce

615-852-8464