What is the purpose of a "network" in health insurance?

The purpose of a "network" in health insurance is to provide a list of healthcare providers who are contracted with the insurance plan to deliver healthcare services to policyholders at negotiated rates. This network may include a variety of providers, such as doctors, hospitals, and specialists, ensuring that members have access to a range of medical services while benefiting from lower out-of-pocket costs compared to using non-network providers.

Having a network helps manage costs and ensures that policyholders receive care from providers who meet certain quality and service standards set by the insurance company. It promotes coordinated care, as these providers work together within the network, facilitating better communication and treatment continuity for the patients. This creates a structured system where members can receive covered services efficiently and affordably.

In contrast, defining covered medical expenses, outlining treatment exclusions, and limiting costs for providers are broader aspects of health insurance but do not encapsulate the specific role of a network. The network essentially serves as a curated list, focusing on where and by whom the insured individuals can receive care under their plan.