Taking a health insurance plan is almost a necessity. However, choosing a plan that suits your budget and requirement takes a decent amount of market research. So, when you look for a health insurance plan, you may come across several options offered by insurance companies that make it crucial for you to understand the terms related to it. The article will primarily focus on the Closed Network plan while talking about the network plan and the most common types of health insurance plans. Read on to know more.
What is a Network Plan?
When a large group or a network of hospitals and health care providers agree to the terms & conditions of a health insurance plan to provide medical services to the plan’s members, is called a Network plan.
A network plan is also called a medical network plan which is designed for the patients so that they can receive the necessary treatment from their primary health care provider (PCP) and take the maximum benefit of their health insurance plan.
What is a Closed Network Plan?
A Closed Network plan is the one when hospitals or medical services providers are not allowed to join an already existing Network plan of healthcare providers. In simple words, a plan that no longer accepts new healthcare providers to provide medical services to its members is a Closed Network plan.
A closed network plan allows the healthcare providers to solely focus on patients’ care as they need not worry about the ever increasing list of providers creating competition. Also, a closed network plan reduces costs for the insurance companies as patients may not get a nearby in-network local provider within time in case of emergency, thus discouraging the use of in-network providers.
This is probably the reason why a closed network plan is generally inefficient in providing an in-network healthcare provider locally. A larger network increases the quality of services as it makes sure that local in-network providers are available for the patients whenever required.
Types of common Insurance Plans offered
The health plans (Bronze, Silver, Gold, and Platinum) are organized by the level of benefits they offer. These plans differ in terms of deductibles, out-of-pocket costs, etc. Once you select the type of plan, you can decide whether you wish to go for a closed network plan or not! You may find the insurance companies offering the following four common types of plans:
Benefits of Closed Network Plan for Providers and Insurance Companies