[Podcast] Understanding Health Insurance Networks - Health Insurance Simplified

In This Episode

In this episode of Health Insurance Simplified, we focus on the importance of deciding on the provider network you'll be able to access under the terms of the plan.

Transcript

Helgeson (Host): Hiring and retaining quality team members can make or break a company, especially during competitive and challenging times. As part of the total compensation package they offer, health insurance can have a significant impact on driving employee satisfaction and retention, because it empowers employees to stay healthy, recover from illness and injury, earn a living, pursue their passion and enjoy life to the fullest. If you're in the market for health insurance, for your employees, you may be wondering what kind of plan is right for you and your business. One of the most important factors when deciding on health insurance is the provider network you'll be able to access under the terms of the plan. Hi, I'm Alan Helgeson, and this is Health Insurance Simplified. Joining me are Hollie from Sanford Health Plan and Perry from Pernell Insurance Agency. Welcome.

Hollie Scott: Thanks, Alan. Thanks for having us.

Perry Bly: Yeah, thanks a lot, Alan

Host: Perry, let's start with you. What is a health insurance network and how do they work?

Perry Bly: It's a great question. I think I would describe networks as the value and strength, the numbers for everybody involved. So an actual network is a subset of providers that've agreed to contract pricing and how that provides value for everybody involved is that the providers accepted a contracted amount. And for the in-return, what they get is a volume of, of customers to come in.. A provider on their own can't drive a lot of customers to their business, but if they're part of a larger contracted network, they can be assured that they're going to have a lot of customers. And so they can take a discounted price or a negotiated price, which helps in return keep premiums low and costs low for the consumers that are part of that network. So it has value for everybody that's involved in the network. So generally speaking, a health insurance network contains physicians within a close geographical area. Members should always check and be sure that they're using a provider that's in network to get the best value for their health care dollars.

Host: Perry, you explained about what a health insurance network is. Let's walk through an example, kind of walk through the steps or how it might work in a situation for, for a family.

Perry Bly: Well, a real example would be a physician's office charge. So Dr. Smith charges $190 for someone to come into his office and for him to speak to them, examine them, find out what's going on and the network we'll, we'll negotiate a price for that visit. So they'll negotiate. Let's say they negotiate all the way down to a hundred dollars. So the doctor agrees to accept the lower price of a hundred dollars for that same visit. He might charge somebody who isn't in a network, $190.

Hollie Scott: For those members who are going to see that the most are going to be those members who are on high-deductible health plans. Because most of us know when we go to the doctor, we might just have a copay to play and we might not see that negotiation that happens on that backend, but high-deductible health plans are very popular. And so how that works is when it goes to your deductible, you are going to see that that negotiation happens. You're going to see on your bill, that it was charged $190, but the Sanford approved amount went down to 100 and that's what the member's responsibility would be.

Perry Bly: Absolutely, great point. And thanks for clarifying that because the high-deductible health plans are absolutely the place where people see the negotiated pricing versus people that have copays. Sometimes people with copays think that's, you know, an office visit is $50. They're not $50.

Hollie Scott: So we just always remind members, it's always a good idea to check the provider network, to make sure who you are going to see for your appointment is in the network. Because if you see somebody outside the network, you're not going to get that negotiated rate like you do with an in-network provider. So it's very important to double-check that before seeing any providers.

Host: Perry, let's go back to you. Why is it important to understand your health insurance network?

Perry Bly: Always take it back to value, but understanding the relationship people have had with their doctors sometimes in a case of their entire life, they've been seeing the same, same system, the same doctor. And so when you're making decision of putting together and offering benefits to network is pretty crucial to the employees involved because, you know, is their doctor going to be in my network? It's a huge consideration to make sure that they're comfortable with the providers they can access.

Hollie Scott: Yeah. And when it comes to, you know, making that decision, a lot of employers will go out and ask their employees, where do you go to the doctor? When you're a small employer, you're, you're like family, right, with your employees. So it's important to understand where they're going so that when you do choose an insurance carrier for your employees, you're understanding that, okay, that network is going to work for my employees or at least the majority of my employees. So it's important to understand what a network actually means.

Perry Bly: Absolutely. So a lot of small businesses will poll those employees, find out what what's going on, where they're accessing. Do they care? Do they have a big concern? Some people just don't care. Some people absolutely it's, it's crucial and vital as, as part of their care process that they access their current system or doctors.

Host: Living here in the Upper Midwest, too, is we have some larger communities, but we have a lot of smaller communities where you have providers in clinics, in hometowns. And oftentimes these relationships we have with our providers, they're like family members. Talk about some of those smaller communities and why that really matters.

Perry Bly: Well, they, those relationships can be generational sometimes. And you really, if, if a network is going to exclude somebody, that's a family member almost in those cases, or they've had a relationship their entire life. I mean, it's a huge decision to, and in a weighs on the relationship of the value of the product, you're providing the benefit to the employee. The whole idea of having those health benefits is to attract and retain employees. If our employee can't access the care they want with the relationship they have, maybe they're not going to be an employee much longer if they're going to seek out other benefits. That's quite possibly a consideration that you'd have to consider.

Hollie Scott: One great thing, Alan and Perry, about Sanford Health Plan, is we have in our service area, we have contracts with a lot of those small town doctors, even those doctors who don't have Sanford on the door, we have a network that involves those providers in those small towns. So we have a little bit of something for everybody in their service area. Otherwise we have wrapped networks that we can wrap on to, to include those providers. So we're glad to have an option for our small employers that include those. Now, it's not in every community. There are some communities where we're not the best fit, but the majority of our service area, we have something for everybody.

Host: Perry, if I live in a small community, knowing that I have that relationship with my hometown provider, I've had this provider for years. What about a connection when it may come time to need specialty services in one of the larger communities, where does network play a role in that?

Perry Bly: Where the network stands out there with Sanford is that if you need specialty care, Sanford has that, that there, the network is full, robust, you have options and lots of them. And so you might not have that access in your small town, but Sanford has it. And it's not far away.

Host: Perry, we've talked a lot about seeing an in-network provider. What if I want to visit my provider who is out of network?

Perry Bly: I think I explain it this way to people. You can go wherever you want to go. You get the best deal, always, if you stay at a provider who's in your network. You can go out of network and depending on, on the structure of your network, a narrow network or a broad network, will you have help? You might have no contracting and it might be at all your costs. You can still go there. That doesn't mean you can't go there. So you should know that you get the best value by staying in network. You're exposed to more costs. And possibly you're outside of limits outside of your network, but you can go. So nobody's telling you, you can't go, but cost is going to be absolutely paramount. And knowing what you're getting involved with when you choose to go outside of your network.

Host: That was a good description. Talking about a provider who might be out of network. Now let's talk about networks. They're not all the same varying in size. What is the difference between a broad and a narrow network, Perry?

Perry Bly: A broad network is going to have more providers and probably a larger geographical area involved in that network. A narrow network is going to be a smaller geographical area, typically with less providers. But the value in that is that your close proximity to those providers gets you better cost sharing. I think there's a lot of value in a narrow network as long as you understand your narrow network and what you might consider a limitation. I, I don't really think there's limitations. I think the value comes in having a close network where you can get a discount for being close to that network that you're going to access.

Hollie Scott: With your narrow, we call it focused at Sanford Health Plan. In our focused network, it costs you less money because we have better discounts with those providers. And when it comes to offering health insurance to a small business and to your employees, it comes down to costs for a lot of people. And we don't like to, you know, talk about price all the time, but with our focus network, it costs about 20% less on average than our broad network. And not only does it cost less money, but when you see our Sanford providers, you go to a Sanford primary care provider, they send you to a specialist—they're all in the same system. They can see notes from those visits. So there's, there's huge value in seeing doctors who belong to the same network.

Host: Thank you for talking about the size of the network and what really those differences mean, but are there any final considerations that maybe employers should look to when they're considering the type of network or the insurance that they want to bring in for their employees?

Perry Bly: Absolutely. There's when employers considering bringing benefits and providing health insurance benefits for their employees, that network is going to be a consideration because that's going to fit back into their budgeting, you know, how much they want to spend on providing these benefits and do their employees fit within that network. Having a robust network is going to be good for their employees. If it fits their budgets, they feel good about the product that they can provide their employees, that those benefits and they're meeting the needs of their employees, and that's good for the community and then future needs. So a network is going to help control costs internally. Hopefully that's going to control their costs. Everybody's trying to do their part to control all of these aspects of, of health care and health insurance as they come together at those meeting points in those offices and, and labs and things.

Hollie Scott: With Sanford Health Plan, as I mentioned earlier in the episode, we have two network options for our small employers. We have our broad network and we have our focus network. And depending on the size of your group, you can actually offer both to your employees. So depending, you know, again, where budget is, you might have an employee who wants to see providers in that broad network that aren't in our focus network, and they can afford to pay a little bit more, but you might also have employees who I see Sanford, I'm going to pay less money and that's okay with me. You know, the more money I can save the better. So with Sanford Health Plan, we have lots of options for these small groups to help stay within their budget, still have the option for their employees to see providers who are in our broad network or within our focus network. So lots of options with Sanford Health Plan.

Perry Bly: Employers have probably too many decisions to make just in life, but when it comes to benefits, there's probably more choices than they want to make there, but they've got a lot of good options. And network is just part of that consideration and is probably one of the considerations that they don't place as high as they think they are. But it is part of the overall package when they're, when they're making those decisions.

Host: Perry and Hollie, I want to say thank you for taking some time and the confusion of the types of networks and those differences that are important when it comes to choosing the right plans for your employees. To learn more about the options through Sanford Health Plan, visit SanfordHealthPlan.com/employers. You can also call (877) 305-5463, Monday through Friday 8:00 AM to 5:00 PM central time. This info is also in the show notes for this episode. For Health Insurance Simplified, I'm Alan Helgeson.