What do out of network benefits really mean?

I just recently ran into a few situations, where clients were concerned about “Out of Network benefits”. Typically in the health insurance world there are 2 types of coverages, “In Network Only Plans” (HMO’s, and EPO’s) and “In and Out of Network Plans” (PPO’s, and POS).

Now the question I hear the most often is, “How do out of Network benefits work?”

Typically, aside from the deductible you have to meet, there is a UCR %. What UCR means is “Usual, Customary and Reasonable”, this simply means the insurance company calculates the reasonable “cost” of the procedure and picks up that %.

It does NOT mean they will pick up that % of the total cost.

Let me give you an example.

You have a $25,000 procedure done by your doctor, your UCR % is 80%, and the insurance company thinks the reasonable cost of the procedure is $20,000.

This means they WILL PAY 80% of the reasonable $20,000 which is $16,000.

Leaving YOU with a total cost of $25,000-$16,000= $9,000.

It doesn’t mean your doctor overcharged you for a procedure, it’s simply based on how insurance companies calculate reasonable costs.

The other misconception many client have is “What if I have no out of Network benefits and someone gets hurt out of state? (i.e. on vacation).”

The simple answer… YOU’RE COVERED!

All insurance plans have to cover you regardless of whether your In Network or NOT in EMERGENCY SITUATIONS!

So, you may not be able to get a check up Out of Network but you will be covered for hospitalization!

Make sure to ask questions and see if out of network benefits are worth the additional cost!

If you have any questions you can always reach me at 631-338-9917.

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