What Does OON DED Mean on an Insurance Card?

Health insurance cards often display a series of abbreviations and codes that can be confusing for many individuals. These shorthand notations represent important details about a health plan, directly influencing out-of-pocket costs and access to care. Understanding these abbreviations is a necessary step for navigating the complexities of health insurance, especially “OON DED.”

Understanding “OON” and “DED”

The abbreviation “OON” stands for “Out-of-Network.” This term refers to healthcare providers, such as doctors, hospitals, clinics, and specialists, who do not have a contractual agreement with a specific health insurance plan. When a provider is out-of-network, they have not agreed to the negotiated rates and terms set by the insurance company, which can lead to higher costs for the patient. Conversely, “in-network” providers have established agreements with the insurer, typically resulting in lower out-of-pocket expenses for the insured.

“DED” is the abbreviation for “Deductible.” A deductible represents the amount of money an insured individual must pay for covered healthcare services before their insurance plan begins to contribute to the costs. For instance, if a plan has a $1,000 deductible, the insured is responsible for the first $1,000 of eligible medical expenses incurred within a plan year. Once this threshold is met, the insurance company starts covering a portion of subsequent covered services.

Combining these terms, “OON DED” signifies an “Out-of-Network Deductible.” This is a specific deductible amount that applies only when an insured individual receives care from healthcare providers who are not part of their insurance plan’s contracted network. Many health insurance plans, particularly Preferred Provider Organizations (PPOs) and Point of Service (POS) plans, often feature both in-network and out-of-network deductibles.

How Out-of-Network Deductibles Function

An out-of-network deductible operates distinctly from an in-network deductible. Plans that offer out-of-network benefits typically establish a separate deductible for services obtained from non-contracted providers, and this amount is usually higher than the in-network deductible. For example, a plan might have a $1,000 in-network deductible and a $3,000 out-of-network deductible. Charges incurred from out-of-network providers contribute solely to meeting the out-of-network deductible. Payments made towards an in-network deductible generally do not count towards the out-of-network deductible, and vice versa.

Once the out-of-network deductible is satisfied, the insurance plan will begin to pay a percentage of the “allowed amount” for subsequent out-of-network services. The allowed amount is the maximum cost the insurer considers reasonable for a specific service, even if the provider charges more. Even after meeting the out-of-network deductible, the insurance plan typically does not cover 100% of the costs.

Some health insurance plans, such as Health Maintenance Organizations (HMOs) or Exclusive Provider Organizations (EPOs), may not offer any coverage for out-of-network care, except in emergency situations. In such cases, an out-of-network deductible would not be applicable, as the insured would be responsible for the entire cost of non-emergency out-of-network services. For plans that do offer out-of-network benefits, the deductible resets at the beginning of each new plan year.

Financial Implications of Out-of-Network Care

Beyond the out-of-network deductible, individuals utilizing out-of-network providers often encounter additional financial responsibilities, such as coinsurance and balance billing. Coinsurance represents the percentage of the healthcare cost that the insured remains responsible for after the deductible has been met. For out-of-network care, the coinsurance percentage is typically higher than for in-network services; for instance, a plan might cover 80% of in-network costs after the deductible, but only 50% for out-of-network care. This means the patient pays a larger share of the bill.

A significant financial risk associated with out-of-network care is “balance billing.” This occurs when an out-of-network provider charges more than the insurance company’s allowed amount for a service, and then bills the patient for the difference. Unlike in-network providers, who have agreed to accept the insurer’s allowed amount as full payment, out-of-network providers are not bound by such agreements. For example, if a provider charges $500 for a service, and the insurer’s allowed amount is $300, the patient could be billed for the remaining $200 after the insurer pays its portion.

Federal protections under the No Surprises Act aim to shield patients from unexpected balance bills in specific scenarios. This act largely prevents balance billing for emergency services and for non-emergency services provided by out-of-network providers at in-network facilities, such as an out-of-network anesthesiologist at an in-network hospital. However, these protections do not extend to all situations, and patients may still face balance billing if they knowingly choose an out-of-network provider for non-emergency care outside of an in-network facility.

Most health plans also include an “out-of-pocket maximum,” which is the maximum amount an insured individual will pay for covered healthcare services within a plan year before the insurance plan covers 100% of eligible costs. Similar to deductibles, out-of-network care often has a separate, and typically higher, out-of-pocket maximum. Balance-billed amounts generally do not count towards this out-of-network out-of-pocket maximum, meaning patients could still incur significant costs beyond this cap.

Locating Out-of-Network Benefit Details

Understanding the specific details of one’s out-of-network benefits, including the deductible, coinsurance, and out-of-pocket maximum, is important for managing healthcare costs. The most comprehensive source of this information is the Summary of Benefits and Coverage (SBC) document provided by the insurance company. The Affordable Care Act (ACA) requires insurers to provide this standardized, easy-to-understand document, which outlines a plan’s costs, benefits, and coverage.

Individuals can access their SBC through their insurance company’s online member portal. These portals offer secure access to detailed plan information, including benefit summaries, claims history, and sometimes even digital ID cards.

For situations where the SBC or online portal does not provide sufficient clarity, contacting the insurance company directly is a recommended step. Customer service representatives can explain specific benefit details, clarify how out-of-network costs are calculated, and confirm individual deductible and coinsurance amounts. The customer service number is found on the back of the insurance ID card.