What is a "preferred provider"?

A preferred provider is specifically defined as a healthcare provider that has a contract with an insurance company to offer services at negotiated rates. This arrangement benefits both the provider and the insurance company: the provider receives a steady stream of patients through the insurer’s network, while the insurance company can offer lower costs to its members for using these providers.

When patients choose to see preferred providers, they typically experience lower out-of-pocket costs in the form of reduced deductibles and co-pays compared to going out-of-network. This incentivizes patients to utilize these providers, promoting efficient care while managing overall healthcare costs.

The other options do not accurately convey the definition of a preferred provider. An out-of-network provider doesn’t have the same contractual agreements, a generic term for any healthcare provider is too broad and vague to capture the specific nature of a preferred provider, and a type of insurance plan covering all providers equally does not align with the concept of preferred networks where specific agreements and benefits are established with certain providers.