Health insurance is a safety net. You (or someone else) pay money to insurers for a health care plan. This plan then helps ease the weight of the bills when you need medical attention. Even though you pay for the plan, the money you save if you get into serious trouble makes it worth having. In fact, without a plan, you may end up paying A LOT of money.

The Players

If you understand the love triangle in health insurance first, you can then understand how the process works. There are three characters in this heart throbbing tale. The first is you, the patient. The second is the health care providers. The health care providers include (almost) anyone or any place that’s involved in the business of fixing the tears and cracks of the human body. A health care provider could refer to a doctor, hospital, health specialist, etc. The last character in this epic tale is the health insurance plan. Health insurance plans act as the negotiator between you and a health care provider and help alleviate medical costs.

Health Care Providers and Health Insurance Companies: The Saga Begins

Before you bought a health care plan or even knew what health care was, a battle raged between two fierce opponents. We have a health care provider on one side and a health insurance company on the other.

The health care provider needs money. Hiring new doctors and bringing in new equipment takes a lot of dough, so the health care provider shows how much medical services cost to the health insurance company.

The health insurance company shakes its head. The amount is too high. What the company wants is to bring the actual cost for medical services down. That way, the health insurance company and people who bought a health plan from the company both save money.

Arguments happen. Pens are thrown. A nose may have been broken. But finally an agreement comes about. The hospital agrees to charge the insurance company and its customers a lower amount for medical services. This new, lower price is called the contracted rate.

When you buy a health plan, you need to make sure which health care providers (hospitals, doctors, etc.) have agreements with your health plan. The health care providers that do have an agreement are called in-network providers. This is super important.

With an in-network provider, your health plan has got your back. Not only does your plan reduce the cost for medical services, but, as you’ll see, they also have additional ways of saving you money.

But with an out-of-network provider, you might be on your own. You could pay the full cost of your treatments unless your health plan has benefits to help you with an out-of-network provider. The moral of this section: If you have a health care plan, in-network provider very good, out-of-network provider COULD BE BAD.