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What is a health insurance network?

Key Takeaways

  • A Health insurance network is your health plan provider’s preferred list of doctors, hospitals, and other healthcare providers
  • Healthcare providers can be categorized as in-network, out-of-network, and preferred 
  • Health Maintenance Organizations (HMOs) and private insurers have their own network of healthcare providers
  • Health insurance companies contract with a network of providers in order to make healthcare services more widely available to plan holders

A Closer Look at Health Insurance Networks

A health insurance network, also known as a provider network, is a list of healthcare providers that are contracted with health insurance plans to provide health-related services. 

Health insurance companies can usually negotiate a discount with healthcare providers that are within their network, allowing individuals who are insured under their plans to pay less for health care services. Healthcare providers who are approved by a given plan are also known as in-network providers.

You can find health insurance plans that include your preferred doctors, specialists, and providers as part of their network right now! All you need to do is enter your zip code to start comparing quotes for free today.

Why do health insurance plans use a network of providers?


The number one reason that health insurance companies use provider networks is to keep their out-of-pocket plan costs low. Brokers for the health insurance companies negotiate with healthcare providers to provide specific services at a set rate. In return, the health care providers agree not to charge you more than the agreed upon rate for service, treatment, and care.

The agreed upon rate is also known as a contracted rate. When you use the health care providers in your health insurance plan’s network of providers, you usually pay less in monthly insurance premiums and other charges.

How do provider networks work?

When you’re comparing health insurance plans, you may find an insurance company that offers several different options for coverage. The health insurance plan you choose ultimately determines which health care providers you can go to to receive services and how much you can expect to pay out-of-pocket for them.

If you want to keep your health care costs low, you can choose a managed plan such as an HMO, PPO or POS (Point of Service). If you choose a managed plan, your health-related costs will only be covered if you use a provider in the plan’s network.

Health Maintenance Organizations (HMOs)


Health Maintenance Organizations, known as HMOs, are managed healthcare plans. An HMO requires you to use their network of health care providers. HMOs have more restrictions than other plans and limit whether or not you can use an out-of-network provider.

For example, if you are comparison shopping and decide to use an HMO to reduce your health care costs, you may need to choose a new primary care doctor if your current doctor is not in the HMO’s provider network.

HMOs will only cover your costs if you use the providers in their network. If you decide to use a provider outside the HMO’s network, the HMO will require you to pay for that care out-of-pocket.

Preferred Provider Organizations (PPOs)

Preferred-Provider Organizations are managed healthcare plans that have their own network of providers. However, these plans allow a little more flexibility if you decide to see an out-of-network provider.

If you choose to use the plans in-network providers, you will pay less in out-of-pocket expenses than you would when you use a provider that is not in the plan’s network. PPOs require you to pay a small deductible/coinsurance for prescription refills and doctors’ visits, and the monthly premiums on PPOs are slightly higher than that of HMOs.

Choosing to Use Out-of-Network Care


If you decide on a health insurance plan and choose to use a healthcare provider outside of the plan’s network, you will likely pay more for your care. This may seem confusing at first. Why would you want to pay more to receive out-of-network care?

Well, the answer is simple: many people remain dedicated to their primary healthcare providers and are willing to pay more in premiums and deductibles to keep them. That is why it is so important to look at the details of the plan to learn exactly how much you will be charged if you decide to use providers that are outside of the plan’s network.

If you have concerns about which doctors and providers are part of a health insurance plan’s network, make sure to review the plan’s provider directory. You can ask your current primary care doctor if he or she is part of the health insurance plan’s network, and also ask them if there were any recent changes to the contract with that health insurance plan.

Once you choose a health insurance plan and decide to seek care either in-network or out-of-network, contact your healthcare provider and make sure they are accepting new patients.

For other inquiries about plan costs and pricing, you can enter your zip code now to start comparing health insurance quotes and companies for free today!


  1. https://www.healthcare.gov/glossary/network/
  2. https://www.healthinsurance.org/glossary/in-network/
  3. https://medlineplus.gov/managedcare.html
  4. https://www.healthcare.gov/glossary/health-maintenance-organization-HMO/
  5. http://https//marketplace.cms.gov/outreach-and-education/what-you-should-know-provider-networks.pdf 
  6. http://http//www.ahipfoundation.org/Interactive-Consumer-Guide.pdf