Warning: Opting Out Of Your Insurance Plan's Provider Network Is Risky
Mon, Mar 17 2014
Many plans sold on the health insurancemarketplaces offer a tradeoff: lower premiums in exchange for limited networks of providers. But consumers who opt for a narrow network plan with the idea that they’ll go out of network when necessary may be taking a big financial risk.
The health law generally places limits on how much consumers can be required to pay out of pocket for medical care (not including premiums). In 2014, the limit for an individual plan is $6,350 and for a family plan, $12,700. But those limits apply only to care provided by doctors and hospitals in a plan’s provider network. There may be a separate out-of-pocket maximum for services provided out of network in marketplace plans, or no cap at all, says Margaret Nowak, research director at Breakaway Policy Strategies, a research and consulting firm that has analyzed cost-sharing and other data on more than 7,000 primarily silver-level exchange plans nationwide.
Similarly, the health law requires that preventive care such as vaccines, cancer screenings and annual checkups be covered at no cost to consumers in most health plans. If someone uses an out-of-network provider, however, they can be charged.
Going out of network opens the door to higher costs in other ways as well. Plans may require patients to pay a higher copayment or coinsurance for an out-of-network provider. In addition, since the doctors, hospitals and other providers are not under contract with the insurance company, in many states those providers may bill patients for any charges not covered by the insurance, a practice known as “balance billing.” The contracts signed by providers who join plan networks generally contain rovisions that prohibit them from balance billing enrollees.
Plans sold on the marketplace are divided into four levels based on the amount of consumer cost sharing required. On average, a bronze plan pays for 60 percent of covered medical services, a silver plan pays for 70 percent, a gold plan, 80 percent, and a platinum plan, 90 percent. But those percentages don’t take any out-of-network care into account, says Sabrina Corlette, project director at Georgetown University’s Center on Health Insurance Reforms.