Grace Financial Service Associates

What is a Network Discount?

A network discount is a medical cost discount that you receive from your insurance company, regardless of your plan deductible. The items that affect the "network discount" are, Zip code, Doctors efficiency and cost criteria, and number of people the insurance company has in the network.

For example, say that you have turned and ankle, and that you have a plan with United Healthcare that has a $1500 deductible, and it is a full "Major Medical" plan. If you were to walk into a Doctors office without insurance, you would be subject to pay the full cost of whatever the doctors office would like to charge for examining your ankle, as well as any x-ray charges done during that examination. For conversational purposes we will say the exam was $150 and the x-ray was $200. However, if you have "Major Medical" coverage with United Healthcare, then regardless of your deductible you would not have to pay the full price of $150 for the exam, or $200 for the x-ray. You would instead, receive a "network discounted" cost of those procedures because of the leverage that can be applied by the insurance company on the Doctor.

This leverage is simple to understand. The more people under the United Healthcare umbrella the more risk United can spread out over their book of business thus allowing them to pay larger discounts for your care. Also the more plan holders there are in the United network the more the Doctor would be willing to accept that type of insurance due to the fact that they would receive more patients with that coverage. This in turn allows a doctor who accepts United insurance to add United plan holders to his practice in higher volume because they can get some of their costs "discounted" by United Healthcare insurance. As a trade off, the Doctor will concede a "network discount". So, in our example, while you may have turned an ankle, and normally been charged $150 for the exam and $200 for the x-ray, the Doctor will accept a "network discounted" rate for his services, set by United Healthcare, simply because he would like to build his book of business.

This discount is given to you regardless of your deductible and can be as much as 25%-50% depending on Zip code, Doctors efficiency and cost criteria, and number of people the insurance company has in the network. The larger the network the more leverage the insurance provider has.

Contact us by filling in the form below and we will use our expertise to help find you plans with a larger network discount.