What does "network" mean in health insurance?

In health insurance, the term "network" refers to a group of healthcare providers and facilities that have established contracts with an insurance company to deliver services to policyholders at agreed-upon rates. This arrangement typically allows insured individuals to access a range of medical services from participating providers, often at lower out-of-pocket costs compared to using out-of-network providers.

The network is designed to ensure that the insurance company can manage costs while providing a directory of healthcare options for its members. When policyholders seek care from these contracted providers, they generally enjoy benefits such as lower copayments and deductibles, leading to cost savings for both the insured and the insurer. Understanding the implications of using providers within a network is crucial for health insurance users, as it directly impacts their healthcare expenses.

The other options do not align with the definition of "network": they reference different concepts related to health insurance, such as the diversity of policy offerings, the scope of coverage for emergencies, or the formulary of medications, none of which capture the collaborative relationship established between healthcare providers and insurance companies that constitutes a network.