The Out Of Network Surprise

June 18, 2018     About this blog:  click here

The Out Of Network Surprise

What is the Out Of Network Surprise? It’s not new, but it’s becoming much more common, and affects more and more health care consumers.

It is not unique to Medicare. Millions of people face this Surprise, whether or not they are on Medicare.

More and more health insurance policies, of all kinds, have “networks” of participating medical providers. These networks have been getting more restricted, especially in the past few years.

The purpose of a network, in the eyes of an insurance company, goes like this: “If we limit which providers our policy will pay for, we can play competing providers off against each other.”

We will get some providers to agree to get a smaller payment from us, in return for our steering more of our insurance holders to go to those providers instead of their competitors.”

It’s a common market tactic, called “trading discounts for volume.” You agree to get a lower payment for each service, but expect to make up for that by getting more customers than otherwise.

Steering the Patients

The way an insurance company steers its enrollees to go to one provider instead of another is through financial incentive: You pay less out of pocket to see the In-Network provider, and pay more if you see one who is Out Of Network.

Some policies are so restrictive that they won’t pay ANYTHING to providers who are Out Of Network. If you go to one of those, you’d pay the entire bill yourself.

Different Co-Pays

Most policies will pay something towards Out Of Network providers, but you will pay more if you want to see them.

Simply put, the Co-Pays to see In-Network providers are going to be less than the Co-Pays to see Out Of Network providers.

Some Co-Pays, by the way, are a percentage of the bill, instead of a flat dollar amount. (Technically, it’s called Co-Insurance.) In that circumstance, you could end up paying a huge Out Of Network Co-Pay, and you had no clue ahead of time.


When people choose an insurance policy, they are often unaware of what a huge difference they might pay for Co-Pays, regarding In-Network versus Out Of Network medical providers.

So, when they go to a doctor who happens to be Out Of Network, they get the surprise of a huge bill for the Co-Pay, that they weren’t expecting.

Most people just aren’t aware of this issue, and aren’t aware of the need to see if the medical providers you want are In or Out of the network for that particular insurance policy.

So, they get blindsided, sometimes for thousands of dollars in a year.

Insurance companies have to provide directories to tell you which doctors, hospitals, and other providers are in their network. Once you’ve bought the policy, they send you a copy.

But then it’s too late! The time to look at the Provider Directory is BEFORE you pick an insurance policy.

Besides that, sometimes the directories are not accurate. However, if you go to a doctor who is listed as In-Network, and later find that he or she isn’t, you have leverage – Complain!

The insurance company should be obligated to treat the treatment as In-Network, since it was their mistake to list the doctor that way in their Directory.

Is there any other way around this?

Some Medicare Supplement insurance policies have NO network at all, which means they will pay any medical provider who participates in Medicare. You will have no difference in Co-Pays regarding who you choose to go to.

A huge factor in picking a policy

It should be clear to you now that the question of In or Out Of Network should be a major factor in picking a policy — unless you have absolutely no preference for certain doctors and hospitals.

Most people with some medical conditions rely and depend on certain doctors and facilities which they use, and want to stick with those. These are the folks who need to look carefully at the Provider Directory BEFORE picking a policy.

Another tactic is to call each doctor whom you like to see, and ask if they are in the network of the insurance policy you’re thinking of buying. The doctor might not know, but his or her billing office will.

It really makes sense, when shopping for a policy, to look FIRST at the question of In-Network and Out Of Network providers – and the differences in Co-Pays, before even looking at the other big questions of Monthly Premium, Annual Deductible, and Maximum Out Of Pocket expense.

It can be a trade-off, however:

Policy A might have lower monthly premiums than Policy B, and might have more of your doctors in its network, but depending on the In-Network and Out Of Network Co-Pays, you might come out ahead financially, on an annual basis, if you pick Policy B!

Bottom line: The only way to get a handle on this is to look at these factors, and try to calculate an estimate of the total Co-Pays you’’ll shell out in year under each policy you are considering.

It’s a bunch of work, but it can save you hundreds of dollars or more.

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