When your doctor has a contract with your health plan.
Your health insurance company will most likely negotiate contracts with your healthcare providers. These providers are in your network. They usually include doctors, specialists, labs for test results, radiology facilities, and pharmacies.
The contracts are an agreement between your health plan and providers about how much the health plan will pay for services. Usually these payments are lower than what your provider normally will charge. The contracts also include your share of costs. Your share might include copayments, coinsurance, and any deductible in your plan.
For example, your primary care doctor may agree with your health plan to charge $100 per visit. If your copay is $20, your insurance pays the rest, or $80.
It is very important to understand all of your in-network costs before you sign up for a health insurance plan. If you visit your doctor often, you might want to choose an insurance plan that has lower in-network costs. If you have lower in-network costs, however, your premium (the monthly amount you pay for health insurance) may be higher. You should always consider all of your anticipated healthcare costs, as well as plan for unanticipated healthcare costs, before choosing a health plan.
June 15, 2015
Christopher Nystuen, MD, MBA