Feeling confused or overwhelmed trying to understand your health insurance plan or costs? You’re not alone. The health insurance system can be complicated to navigate.
For example, what is out-of-pocket maximum? And how does it differ from your deductible?
This article will explain the out-of-pocket maximum and how it relates to your overall health insurance costs. Keep reading to find out more!
Out-of-Pocket Maximum Definition
When you see the term “out-of-pocket” in health insurance it means the amount that you have to pay personally. When you’re sharing the cost of medical care with a health insurance company, the amount they pay and the amount you pay are different.
The out-of-pocket maximum is the maximum amount of money you will have to pay for health care in a year (annually). When you pay money for medical services in the form of copays, coinsurance, and your deductible that goes towards the out-of-pocket maximum.
Deductible vs. Out-of-Pocket Maximum
Your deductible is an amount of money that you have to pay out-of-pocket before your insurance company will share the cost of healthcare with you. For example, if your deductible is $1,000 and your doctor’s visit costs you $250, you will have to pay all $250. You will have to continue paying for services until you have spent a total of $1,000.
When you spend money toward your deductible you are also spending money toward your out-of-pocket maximum. So, in the example above your deductible may be $1,000, but your out-of-pocket maximum could be $1,500.
Once you have met your deductible, you will continue to pay out-of-pocket in the form of copays or coinsurance until you have spent the additional $500. Then, your insurance company will cover 100% of the services.
Exceptions to Out-of-Pocket Maximum
There are exceptions to the out-of-pocket maximum in which your insurance company is not responsible for 100% of the cost. First, you must pay your monthly premium even if you have met your out-of-pocket maximum. This is the cost to keep your health insurance.
You may also have to pay for services that are not covered by your health insurance or if you go out-of-network for medical services. You can ask your health insurance company for a list of medical care providers that are within your network if you are unsure.
What Is My Out-of-Pocket Maximum?
Your out-of-pocket maximum depends on your health insurance company. For Affordable Care Act plans there is a specific out-of-pocket maximum set each year. Plans cannot charge you over that amount.
In 2021, the out-of-pocket maximum for individual plans is $8,550 and $17,100 for families. Check with your insurance provider to find out what your out-of-pocket maximum is this year.
Find the Best Health Insurance Service
Don’t worry – there are affordable health plans out there for you and your family. The out-of-pocket maximum may seem daunting, but there are services out there to help you.
Keeping yourself and your family healthy shouldn’t cost a fortune. Organizations like FutureWise can help find affordable health plans.
Contact us today for more information or call us at (210)-469-3900.