What does the term "narrow network" refer to?

The term "narrow network" refers to a health plan that limits its network of providers as a strategy to reduce costs. This means that the plan includes a select group of healthcare providers, such as doctors, hospitals, and specialists, which are often lower-cost options compared to broader networks. By doing this, health plans can negotiate better rates with these providers, thereby lowering premiums for consumers.

Members of a narrow network plan may face higher out-of-pocket costs if they seek care from providers outside the designated network. This type of structure is designed to control costs while still providing access to necessary healthcare services, making it an appealing choice for certain consumers looking for more affordable insurance options.

Understanding narrow networks is essential for consumers as they evaluate health plans, ensuring they are aware of the limitations and the potential need to choose providers within the specified network to receive optimal benefits.