What is indicated by "out-of-network" in health insurance?

The concept of "out-of-network" in health insurance refers to providers or facilities that do not have a contract with a specific health plan. When a policyholder seeks care from an out-of-network provider, they may face higher out-of-pocket costs compared to in-network providers. This is because insurance companies negotiate lower rates with in-network providers, providing policyholders with better coverage and reduced costs.

In contrast, choosing an out-of-network provider typically results in the patient being responsible for a larger portion of the expenses, as the insurer may reimburse at a lower rate or may not cover the services at all, depending on the specific plan. Understanding this aspect of health insurance is crucial for policyholders to make informed decisions about their healthcare options and cost implications.