What does it mean for a plan to have a 'network'?

When a plan is said to have a 'network,' it refers to a group of healthcare providers—such as doctors and hospitals—who have agreed to provide services to members of the plan at negotiated, often reduced rates. This arrangement allows the health plan to control costs while ensuring that its members have access to quality care. Such networks are common in managed care plans, including Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs), where staying within the network typically leads to lower out-of-pocket costs for the member.

Members generally benefit from choosing providers in the network, as out-of-network services may result in higher costs or may not be covered at all. The concept of a network is crucial to understanding how many health insurance plans operate, as it directly influences coverage, costs, and access to healthcare services.