Doctors & Prescriptions
Why checking your provider network and drug formulary is the most critical step in choosing a health plan.
In-Network vs. Out-of-Network
One of the biggest financial risks in health insurance is seeing a doctor who doesn't accept your plan.
In-Network
Providers who have contracted with your insurance company to accept negotiated (lower) rates. Your plan pays a higher percentage of the cost.
Out-of-Network
Providers with no contract. You may be responsible for 100% of the cost, or a very large portion of it ("balance billing").
HMO
Health Maintenance Organization:
Usually limits coverage to care from doctors who work for or contract with the HMO. It generally won't cover out-of-network care except in an emergency.
PPO
Preferred Provider Organization:
You pay less if you use providers in the plan's network. You can use doctors, hospitals, and providers outside of the network without a referral for an additional cost.
EPO
Exclusive Provider Organization:
A managed care plan where services are covered only if you use doctors, specialists, or hospitals in the plan's network (except in an emergency).
The Drug Formulary
Every insurance carrier has a specific list of covered drugs called a "formulary," and it changes every single year.
- 1Tiers Matter: Drugs are grouped into tiers. Tier 1 (generics) are cheapest, while Tier 4 (specialty drugs) can cost thousands.
- 2Yearly Changes: Just because your medication was covered last year doesn't mean it's covered this year. Carriers often move drugs to higher tiers or remove them entirely.
- 3Restrictions: Watch out for "Prior Authorization" or "Step Therapy" requirements that can delay your access to medication.
Why You Shouldn't Do This Alone
Checking every doctor against every network and every prescription against every formulary is complex and time-consuming. Online directories are often outdated or confusing.
An experienced, licensed insurance agent has professional tools to:
- Verify provider participation in real-time
- Compare total drug costs across plans
- Spot hidden network restrictions
- Ensure your specialists are covered