In-Network vs. Out-of-Network

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ByNathan Paulus
Edited byRae Osborn
ByNathan Paulus
Edited byRae Osborn

Updated: May 22, 2024

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In health insurance, medical services will either be in-network or out-of-network. An in-network provider has negotiated a contract with the health insurance company, agreeing to offer services at predetermined rates. This arrangement typically results in reduced costs for policyholders. Insurance companies also help cover the cost of in-network services through co-insurance.

Conversely, out-of-network providers don’t have such agreements with insurance companies, so patients will generally pay more for services. In addition, many health insurance plans don't cover out-of-network care outside of emergencies.

Knowing the difference between in-network and out-of-network providers can reduce out-of-pocket costs and prevent unexpected expenses. Here's a breakdown:

Key Differences Between In-Network vs. Out-Of-Network


Refers to providers that have a contract with your health insurance company to deliver medical services at predetermined rates.

Refers to providers that don't have specific rate agreements with your insurance company.

Cost and Coverage

You typically pay lower out-of-pocket costs due to the agreed-upon rates between providers and insurers. Your insurance also covers more of the cost of in-network care.

You often face higher out-of-pocket costs, as there are no negotiated rates, and your plan may not cover out-of-network care. Emergencies tend to be exceptions.


The provider often bills the health insurance company directly, and you then receive a bill from the insurance company if there is a remaining balance left to pay.

The provider often hands the bill directly to you, which you can submit to the insurance company for reimbursement if your plan includes out-of-network coverage.


Limited provider choices; you might need referrals for specialists.

You enjoy more flexibility in choosing providers and might not need referrals.

Specialized Care

Access might be restricted if the needed specialist isn't within the network.

Greater likelihood of accessing specialized care.

What Is an In-Network Health Care Provider?

An in-network health care provider has an agreement with an insurance company to offer services at set rates, typically lower than those of out-of-network providers. Using in-network health care providers is usually ideal, but there are also some disadvantages. All health insurance plans include a network of providers, but two types of plans generally cover in-network care exclusively: EPOs and HMOs.

In-Network Plan Types: HMO and EPO

The following plan types typically include coverage for only in-network services. The differences between them directly influence health care costs. Let’s look at these different types:

  • HMO (Health Maintenance Organization): HMO plans strongly encourage you to use their network of doctors and hospitals. In-network services often come with lower out-of-pocket costs. HMO plans don't generally cover out-of-network care, except in emergencies, and they may require a referral if you need to see a specialist.

  • EPO (Exclusive Provider Organization): Like HMOs, EPO plans only cover in-network care, except in emergencies. However, they generally offer a larger provider network than HMOs and don't usually require referrals. They offer no coverage for out-of-network care, making it crucial to use health care providers within the network to avoid high out-of-pocket expenses.

Pros and Cons of Using In-Network Health Care

In-network health care typically offers lower out-of-pocket costs and reduced paperwork but may limit provider choices. Below is a table detailing these benefits and drawbacks.

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  • Typically, lower out-of-pocket costs due to negotiated rates and higher co-insurance
  • Predictable billing with alower chance of unexpected costs
  • Reduced paperwork as the provider bills the insurance directly
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  • More limited choice of providers depending on medical need

What Is an Out-of-Network Health Care Provider?

An out-of-network health care provider has no rate agreement with your health insurance company. Choosing such providers alters billing and usually incurs higher costs than in-network services. The following are some reasons you might choose or inadvertently end up with an out-of-network provider:

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    Specialized Care

    You might need a specific treatment or specialist not in your insurance network.

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    Quality and Reputation

    Certain out-of-network providers may offer superior care or have outstanding reputations.

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    Geographic Limitations

    Travel or relocation might necessitate visiting an out-of-network provider, especially in emergencies.

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    Not Knowing the Status of Every Doctor Who Treats You

    You may choose an in-network facility but receive care from an out-of-network doctor or provider, leading to unexpected costs.

Out-of-Network Plan Types: PPO and POS

The following two plan types typically offer some out-of-network coverage in addition to in-network benefits:

  • PPO (Preferred Provider Organization): PPO plans grant you more flexibility in choosing providers. They cover both in-network and out-of-network care, though the former typically at reduced rates and a higher percentage. While encouraged to use in-network providers, members can opt for out-of-network care if necessary.

  • POS (Point of Service): A POS plan offers you a blend of PPO and HMO features. You'll pick a primary care physician (PCP) within the network, who can then refer you to specialists if needed — even if they’re out-of-network. While in-network care keeps your costs down, you can explore out-of-network care with a referral from your PCP.

Balance Billing

Balance billing is when a health care provider bills a patient for the difference between an out-of-network provider's charge and the amount allowed by the patient's insurance. Balance billing happens after the insurance company pays the provider the allowed amount for services rendered.


John visits Dr. Thompson, an out-of-network cardiologist, for a consultation. Dr. Thompson's fee is $300. While John’s policy does cover out-of-network visits, his insurance only reimburses up to $180 for such consultations. Dr. Thompson then bills John for the remaining $120. This remaining charge is an instance of balance billing.




Insurance Reimbursement


John's Balance


Pros and Cons of Using Out-of-Network Health Care

Out-of-network health care provides greater provider flexibility and specialized care access. However, it often comes with higher costs. We detail these benefits and drawbacks below.

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  • Greater flexibility in choosing health care providers
  • Access to specialized care that might not be available in-network
  • There is no need for referrals, allowing direct access to specialists
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  • Typically, higher out-of-pocket patient costs
  • More paperwork as patients might have to file claims
  • Less predictable billing and a higher chance of unexpected costs

In-Network vs. Out-of-Network Examples

Here are four examples illustrating the financial and logistical differences between in-network and out-of-network health care services:

1. Routine Check-Up

Jane recently moved to a new city and is experiencing persistent headaches. She decides to see a doctor and finds two highly recommended primary care physicians nearby. Dr. Smith, the closer one, is out-of-network, while Dr. Adams, a 30-minute drive away, is in her health insurance network. Her health insurance plan includes limited coverage for out-of-network care.


Jane visits Dr. Adams, her in-network primary care physician. She pays a $20 copay, and her insurance covers the rest.

Jane visits Dr. Smith and receives a check-up bill for the full $150. Her insurance reimburses only $50, leaving her to pay $100 out-of-pocket.

2. Surgery With Multiple Specialists

Bob experienced a severe knee injury during a hiking trip. His orthopedic doctor informed him that surgery was inevitable. While researching, Bob discovers two top-tier hospitals known for orthopedic surgeries. The local Community Hospital is in his insurance network, but the Hillside Orthopedic Center, renowned for its success rate, is out-of-network.


Bob opts for the local Community Hospital, ensuring that the entire medical team, from the surgeon to the anesthesiologist, is in-network. Post-surgery, his insurance covers most of the costs, leaving him with a $1,000 out-of-pocket bill that goes toward his deductible.

Bob chooses the Hillside Orthopedic Center for its reputation. However, he's faced with a hefty bill of $20,000. His insurance only covers $8,000, burdening Bob with a $12,000 out-of-pocket expense.

3. Specialized Treatment

Sarah was diagnosed with a rare neurological disorder and cannot find a specialist within her HMO network. She faces a decision: get referred to an out-of-network neurologist or wait for an in-network specialist to become available.


Sarah would have visited an in-network specialist had they been available. If they had, she would have only paid a $40 copayment for a consultation.

Opting for immediate care, Sarah sees an out-of-network neurologist. She receives a $500 bill for the consultation, which she will have to pay entirely out-of-pocket.

Frequently Asked Questions About In-Network vs Out-of-Network

Understanding in-network and out-of-network providers is essential for health care decisions. This section provides answers to common questions about these provider types.

Why are in-network services generally cheaper?
Can I get any reimbursement if I see an out-of-network provider?
How can I determine if a doctor, clinic, or hospital is in-network?
Can an in-network status change?
Do out-of-network payments count toward annual deductibles?

Related Content

For further clarity on health insurance topics, consult the following MoneyGeek resources. Each offers specific insights related to in-network and out-of-network considerations.

Choosing and Maximizing Your Plan — This guide offers insights on selecting the best health insurance plan and optimizing its benefits, a foundational step before understanding in-network versus out-of-network distinctions.

Can You Have Two Health Insurance Plans? — Explore the complexities and benefits of holding dual health insurance. Knowing how multiple policies work can influence decisions using in-network or out-of-network providers.

Health Insurance Glossary — Familiarize yourself with key health insurance terms. A solid grasp of industry jargon can enhance comprehension of in-network and out-of-network nuances.

About Nathan Paulus

Nathan Paulus headshot

Nathan Paulus is the Head of Content Marketing at MoneyGeek, with nearly 10 years of experience researching and creating content related to personal finance and financial literacy.

Paulus has a bachelor's degree in English from the University of St. Thomas, Houston. He enjoys helping people from all walks of life build stronger financial foundations.