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A preferred provider network is a list of doctors, hospitals, and other health care providers who have agreed to offer discounted fees or negotiated fees. When you choose a preferred provider, you are withholding your right to choose any other provider and are committed only to physicians in the network.
Many employers offer discounted rates for members of their own employee groups as well as their family members. These discounts require that the employee get referrals from her healthcare provider for participating specialists such as orthopedic surgeons or dermatologists in order for them to get reimbursed at full charges instead of discounted rates. Preferred Provider Networks help employees save money on health costs when they don’t bother with comparisons.
Employers defend this practice by claiming that such a discount helps employees save money on health care costs. However, that claim isn't always true. Employer-sponsored health plans are typically more expensive than coverage purchased directly from the insurance company. It is unlikely that employers have achieved the savings they really seek by offering their own employees preferred provider networks.
In fact, employer-subsidized plans may result in an employee who pays more because she has selected a network of physicians and hospitals she likes, making her more likely to stay with her current plan. If one’s plan is not preferred by an employer, one may have to pay higher rates for a less desirable plan or do without healthcare altogether.
Many employers offer discounted rates for members of their own employee groups as well as their family members. These discounts require that the employee get referrals from her healthcare provider for participating specialists such as orthopedic surgeons or dermatologists in order for them to get reimbursed at full charges instead of discounted rates. Preferred Provider Networks help employees save money on health costs when they don’t bother with comparisons.
Employers defend this practice by claiming that such a discount helps employees save money on health care costs. However, that claim isn't always true. Employer-sponsored health plans are typically more expensive than coverage purchased directly from the insurance company. It is unlikely that employers have achieved the savings they really seek by offering their own employees preferred provider networks.
In fact, employer-subsidized plans may result in an employee who pays more because she has selected a network of physicians and hospitals she likes, making her more likely to stay with her current plan. If one’s plan is not preferred by an employer, one may have to pay higher rates for a less desirable plan or do without healthcare altogether.
