With the ever-increasing costs of healthcare, it’s more important than ever to know your options. One term you might not be familiar with is “narrow network health insurance,” also known as narrow network health plans. This is a relatively new type of health insurance plan that tends to be more affordable than traditional options.
That said, it’s important to understand exactly what you’re getting with a narrow network plan to make sure it’s the right fit for you. Here’s everything you need to know about narrow network plans and what it might mean for your out-of-pocket healthcare costs.
What Is a Narrow Network Plan?
Narrow networks are designed to be more affordable than traditional networks. They achieve this by limiting coverage to a select group of physicians, specialists, and hospitals.
There is no universal standard for what constitutes a narrow network plan or how many providers are (or are not) included. Insurance providers determine what to include in their narrow network plans. What is universal is that a narrow network plan from an insurance provider will be more limited than that provider’s broader/more traditional plan.
Are Narrow Network Plans a New Concept?
These plans aren’t necessarily new; they’ve been the dominant plan type in the individual insurance marketplace since the Affordable Care Act became law in 2010. As of 2019, 72% of individual insurance plans could be categorized as “narrow networks” or “ultra-narrow networks.”
What is new is the increasing popularity of narrow network plans provided by employers. Rising premium costs have made traditional plans cost-prohibitive for many employers. Narrow network plans offer employers a way to provide health insurance at a lower cost per employee. These savings can then be passed on to employees.
Are There Benefits to Narrow Network Plans?
Don’t let the words “limited” or “narrow” deter you. There are plenty of benefits to narrow networks that you might not get from a traditional plan. Although options might be more limited, the providers included in narrow network plans generally have been proven to have higher measured quality and better patient outcomes.
Providers within a narrow network also typically have strong working relationships because they work together frequently. Better communication between doctors can mean more comprehensive and effective patient care.
Narrow network plans are similar to HMOs. As with standard HMOs, narrow network plans can be limiting. If you have a certain physician, specialist, or hospital you’d like to use, you might have to pay out of pocket to receive that care. But unlike HMOs, narrow network plans do not require referrals from primary care physicians to in-network specialists. Considering the average copay to see a PCP is usually $30 to $50 per visit, it’s easy to see how these savings can quickly add up.
Finally, many narrow network plans offer added benefits to their plan members to promote health from home, such as free health coaching and live video services.
Cons to Consider: Out-of-Pocket Costs
Now let’s take a closer look at the downsides of narrow networks. Although premiums might be lower, options for in-network providers can be limited.
And while traditional plans typically offer some assistance for out-of-network providers, narrow networks do not. That means patients who need to see providers who are not within their networks are fully responsible for the “true” cost of their care. Out-of-network care does not adhere to the negotiated rates of in-network care, which means these costs can be substantial.
With how common it is for individuals to visit out-of-network providers, consumers should not view these situations as fringe scenarios. If you or your dependent family member have a narrow network plan and need specialized care, you could end up paying substantial out-of-pocket costs.
However, if you are relatively healthy and able to budget for these out-of-pocket expenses, you could save on overall healthcare costs by choosing a narrow network plan.
Choosing the right healthcare plan might seem complicated, but paying for healthcare doesn’t have to be problematic. Paytient is the perfect complement to any healthcare plan. Whether you choose a narrow network plan or a more traditional offering, Paytient can help you pay for the care you need.