Are there really out of pocket Maximums?
We often hear the phrase, “Read the Fine Print”, and the only reason why that phrase is still being propagated is because of its weight. Imagine for a second that you are watching a commercial for the newest workout product, “Bob’s Abdominal Crusher”, and the entire infomercial is filled with toned athletes crunching away on Bob’s new machine. The infomercial constantly shows interviews of individuals that say things like; “I didn’t change my lifestyle at all except for purchasing this machine, and I have shredded 10 pounds already!” and “In a month I went from a zero to a hero!”. Being the reasonable man or woman you are, you first doubt their testimonials, but after seeing toned athletes being paraded around the set, you feel an urge to buy, so you pick up that phone and order your new workout equipment. You receive the product in the mail, and after three months of using it, you realize that the ads were a bit deceiving. Apparently, in the fine print below the infomercial was a section that informed the viewer that the testimonials were from individuals that, while using the machine, also went on a very strict diet so they could lose weight. Now you are looking at yourself in the mirror trying to see if you lost any weight, but instead, found out all you lost was time and money that could be in your wallet.
What are Out-of-Pocket Maximums?
An out-of-pocket maximum is a term used for health insurance policies that essentially means that once you have paid a certain amount of money out of your own pocket, the insurance carrier will pay for the rest of the covered services until the next policy period begins. So, for example, if Susie has an out-of-pocket limit of $5000 and she has paid $5000 in qualified costs, then her health care plan will pay 100% of the allowed amount. Sounds pretty easy? Here is where, “Read the Fine Print” becomes important.
What costs go towards the Out-of-Pocket Maximums?
The costs that qualify for your out-of-pocket maximum depends on your health plan and what services you use. Not all co-payments, co-insurance, deductibles, and premiums will count towards your out-of-pocket maximums, so you need to read through your policy, talk to your carrier, or talk to your broker to find out what payments actually will count.
Even if you do reach your Out-of-Pocket Maximum, you can still pay Out-of-Pocket
Yes, you read that correctly. Remember that out-of-pocket maximums will cover your allowed amounts for services, meaning, if you go out of network and are balanced billed, or go out of network or find a service that you are not covered for, you will be paying out-of-pocket. Also, you will still be paying for your premiums, so even if you reach your out-of-pocket maximum, you will still be paying your monthly subscription.
Protecting my Clients by giving them the Knowledge of Health Care
One of the, in my opinion, strangest occurrences that I deal with is when I am either speaking to either a client or a friend regarding health care and their out-of-pocket maximums and they tell me that they paid more than their out-of-pocket maximum even though they were having services in-network. “Brett, I thought I reached my maximum, why am I still paying for these services?” After I asked them a thousand questions to find out why, I asked if they have an HMO, and then I knew to ask one more specific question that usually solves the problem, “Did you inform your insurance carrier that you have reached your maximum?”, to which I receive the response, “Uhm… don’t they already know that?” The big hint here is that insurance carriers often don’t know if you have reached your maximum (this usually only applies to Health Maintenance Organizations (HMOs). I will use the word “often” here because different carriers and different policies tend to change, but normally, they do not keep track of you and your expenses in HMOs). What I always tell clients during enrollment is that they need to be upfront with their insurance carrier once they have reached their maximum so they can stop paying for services that the insurance plan should be covering 100%. A lot of changes have been happening during the Affordable Care Act Health Care Reform, and I want everyone to understand this.
I hope this reading has helped you understand what out-of-pocket limits really are, and thank you for reading. Have a great day!
Additional Disclaimer – Although I am an Insurance broker and a professional in the field, the Health Care laws are ever changing, especially in the age of the Affordable Health Care Act, and the laws, information, opinions, or understandings that I have wrote about may be obsolete by the time you come across them and I take no legal responsibility for what actions you may or may not take because of it. To keep yourself safe, please seek updated professional advice, because changes are happening and I would like to keep everyone safe from any misleading or dead information. Please check out the “Terms and Conditions” page for more information and/or bookmark my blog for upcoming changes and updates to the ACA. Thank you for reading, and have a great day!