In-Network vs. Out-of-Network Costs Comparison | Health Coverage Guide by Small Business Majority

In-Network vs. Out-of-Network Costs Comparison

Here are some comparisons of how much you’ll pay with various plans from an in-network provider versus an out-of-network provider. Say you visit a provider who usually charges $1,000 for a service. But, that provider is in your plan’s network. That means they have agreed to accept your insurer’s contracted rate – say, $500 – rather than the amount they normally charge.  How much will you have to pay?

In-Network Hospital
(Plan pays 80%)
Out-of-Network Hospital
(Plan pays 60%)
Actual hospital charge:
$22,000
$22,000

Amount recognized by medical plan:
$14,000
(the discounted rate for health plan)
$14,000Plan does not recognize the $8,000 difference

Medical plan pays:
80% of discounted rate:
$14,000 x 80% = $11,200
$14,000 x 60% = $8,400
Member pays:
20% of the discounted rate:
$14,000 x 20% = $2,800
40% of charges ($14,000) plus 100% of the amount the plan does not recognize ($8,000):
$5,600 + $8,000 = $13,600

Source: California Department of Managed Health Care