Understanding your health insurance plan is important in order to save money and receive the highest benefits available. The best way to save on out-of-pocket expense is to use network providers.

Each insurance carrier has a group of health service providers that have applied to, and been accepted, into their network. These service providers negotiate set fee prices for their services and agree to accept those fees as payment. These fees are lower than they charge to patients they see that don't have insurance, or to patients that have an insurance they do not participate with.

In order to get accepted into a network there are certain criteria providers must have and the screening process is quite intensive.

Using network providers saves you and the insurance company money because of these set fees. The insurance company pays out less, and any out-of-pocket expenses you may have will also be less. This is because all policies pay on a percentage basis, unless the policy is an HMO, better known as a Health Maintenance Organization. They pay 100% for many services.

This out-of-pocket expense is called coinsurance and must be paid by the member along with deductibles and co-pays. When you use providers that are in the network this lowers the balance due by the member. Each policy does have a cap on the coinsurance and once this limit is reached, the member will have their claims paid at 100% for the remainder of the year.

Each health insurance plan sets different limits for the network coinsurance cap and the out of network coinsurance cap. As long as you stay in the network, all deductibles, and coinsurance will be much smaller. This is a great savings to you and your family and something you should strive for.

You might be wondering why providers would agree to less money and go with the fees set by the insurance company. The providers realize that serving many people at a lower cost is easier for them to make a living than finding patients with no insurance and charging them a higher fee. They also realize that most people do have some kind of insurance and that is the reason they work with the insurance companies.

Besides saving you money there is another great benefit of using network providers. They must always file your insurance claim for you. It is part of their agreement with the network. This makes getting your claims paid go a lot smoother.

Having the right providers is a financial asset you can't afford to be without. Know your benefits and use network providers to insure that you and your family get the best services for your insurance dollar.