The Out of Pocket Maximum is the most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copayments, and coinsurance, your health plan pays 100% of the costs of covered benefits.
The out-of-pocket limit doesn’t include your monthly premiums. It also doesn’t include anything you may spend for services your plan doesn’t cover.
Please scroll down for more details and explanations of each of the key terms as they are interrelated.
The deductible is the amount the insured person must pay for covered services during a calendar year, January 1 through December 31, before health benefit payments begin. The deductible is usually a set amount or a percentage determined by the member’s contract – insurance policy. For example, a plan might require the insured to pay the first $500 of covered expenses during a calendar year before any benefits are payable.
May 2019 Articles
News reports about how high deductibles leave people effectively without medical care as people are living on the edge – paycheck to paycheck.
How might an HSA Health Savings Account help you save up to pay the deductible?
How Premiums and Deductibles Work
A way in which the enrollee shares in the cost of health care. The benefit plan requires the enrollee to pay a flat dollar amount per unit of service. An example of a common co-pay is $10 per physician office visit.
An arrangement under which the insured person pays a fixed percentage of the cost of medical care after the deductible has been paid. For example, a health plan might pay 80% of the allowable charge, with the enrollee responsible for the remaining 20%; the 20% amount is then referred to as the coinsurance amount.
refers to the most you pay for covered expenses during the year before your plan begins paying 100% of covered expenses for the remainder of the year. It is a sum of deductible and coinsurance amounts. Only covered expenses, as determined by your contract, count toward the maximum. Other costs, such as amounts you pay for non-covered services or charges in excess of our allowances, don’t count.
This is the maximum dollar amount of Covered Expenses for which the Member is responsible in a Calendar Year. After that maximum is reached, this plan will pay 100% of Covered Expenses incurred during the remainder of that Calendar Year.
Example of out-of-pocket maximum with high medical costs
Let’s say you need surgery with allowable costs of $20,000, and the following figures apply to your health insurance plan.
You pay the first $1,300 of covered medical expenses (your deductible).
Your 20% coinsurance on the rest of the costs ($18,700) comes to $3,740.
So your total costs would be $5,040. That’s $1,300 (your deductible) plus $3,740 (coinsurance).
But your out-of-pocket maximum is $4,400. Your insurance company pays all covered costs above $4,400 — for this surgery and any covered care you get for the rest of the plan year.
Generally, plans with lower monthly premiums have higher out-of-pocket limits. Plans with higher premiums usually have lower out-of-pocket maximums. HealthCare.Gov
is a type of member cost sharing that requires a flat amount per unit of service or unit of time. This is may be a percentage of the charges or a dollar amount for specified services. See also Blue Cross Specimen Policy Page 161
Understanding Health Insurance Costs
Understnading Health Insurance Costs
Ask Us a Question
Can you explain a couple basic things about my Blue Shield of California, Bronze, HSA plan (non-exchange), for ONE person in the 91941 zip code?
***First, let’s refer to the Actual (EOC) – Evidence of Coverage by clicking here. The EOC on page 3 refers to the “matrix summarizing key elements” to verify the actual numbers. I believe the matrix is the benefit summary guide (where it does say in the body, that it is the Uniform Plan Benefits and Coverage Matrix and for the PPO HSA Bronze that is on page 55.
I’ve called Blue Shield three times but have yet to get a native speaker that can explain this to me. It’s complicated (to me)– so I want to make sure I understand properly. Their web site is horrible – so I thought I’d ask you. I figured you’d know the answer off the top of your head.
***I might have it off the top of my head, but I like to have an actual citation, so that I don’t have to pay a claim if I’m wrong.
My plan is as follows:
|HSA Bronze||Participating Providers||Non-Participating Providers|
|Calendar Year Deductible||$4500||$4500|
***I like to take a screen shot of the actual Insurance Company Brochure
Questions for you are:
- Does my $4500 deductible apply/accrue to the $6250 max OOP, in network? In other words,
- Once I pay out $4500 in deductible payments, then I have another $1750, in co-pays (at 40%) to pay out… at which point I will have reached the maximum out of pocket for the year
- After I have paid out all the deductible ($4500), then the co-pay counter starts at zero (at 40%) and I have an additional $6250 to pay out (effectively making my “annual OOP” $10,750? )
- What happens when some of my provides are “not-participating” providers. I have some labs and such that aren’t part of “the network” for lab work that was “subbed out”.
- Does the same $4500 deductible apply to non-participating providers AND participating providers – or – does my deductible start at $zero with a new $4500 deductible for non-participating providers as well (thereby making the deductible $9000 for in and out of network?
***This is why I like to view the ACTUAL EOC or Summary of benefits
- What about the OOP max? Does is the $9250 inclusive or exclusive of the $6250 max OOP for “non-participating” providers?
***Inclusive is a big word for me. See above, co-pays apply to both participating and non participating facilities.
- How do I best deal with my ‘in-network” providers sending my stuff (labs, etc) out to non-participating providers without my knowledge? Just suck it up or what?
***Ask them to do their best to send you to net work providers, they are supposed to do that automatically. Learn More on page 9 – choice of providers… in the EOC. The EOC states that Blue Shield will consider a request for services that cannot be reasonably provided in the network.
Here’s a couple of questions from our clients posted for it’s educational value.
I can’t believe how high the deductibles are! So if the deductible is $6000,
***Do you mean deductible or out of pocket maximum?
we have to pay for all doctor visits and tests, ex-ray, etc. until we have paid $6000 before insurance kicks in?
Blog Insure Me Kevin.com 11.26.2016 practical limitations money wise of going out of network – namely Maximum Out of Pocket OOP Limit is effectively much higher.
I think I know the answers – but each of the BS people told me a different story (at least I think they did – I couldn’t understand them).. Yikes!
***I Thank you VERY much for sending the question which you wrote out very well in writting and allowing me the time to find the actual Plan Benefits & Coverage Matrix.