In health insurance terminology, what does "network" refer to?

In health insurance terminology, the term "network" specifically refers to a group of healthcare providers—such as doctors, hospitals, and specialists—that have an agreement with a health insurance plan to provide services at reduced rates. This arrangement benefits both the insurers and the providers; the insurers can offer lower-cost plans to consumers, while the providers gain access to a larger pool of patients.

When members of the insurance plan seek care from these network providers, they typically pay lower out-of-pocket costs compared to going outside the network. This cost efficiency is a major incentive for members to utilize network services, as it helps manage overall healthcare expenses.

Understanding this concept is crucial because a network can influence the choices available to insured individuals and their overall healthcare costs.