Just was thinking about this the other day while looking at my insurance. How do people in the U.S. accumulate huge bills without hitting their max out of pockets? Are cancer treatments not usually covered by insurance? Are the doctors that provide the treatment just happening to be out of network?
I guess I’m wondering if there is anyway I can plan to not be in a situation of me or my husband rejecting treatment and dying or having huge medical bills cripple us. We’re relatively healthy now, but the future is near.
I’d like to understand better how it seems to be so *common* for people to not be covered by their out of pocket max.
Thanks.
In: 4623
There are still many people who could easily be put into a stressed financial situation over $7,000 or so in unexpected expenses. Not everyone has that much disposable savings laying around.
And some of those in such a group might not even have insurance, or have a plan that doesn’t have an annual maximum or covers that type of service
I was bankrupt by medical bills because I didn’t have the good fortune of having insurance when I was diagnosed with cancer at the age of 25. This is the issue with having medical insurance run through an employer.
Also, dont assume that just because an insurance policy has a maximum out of pocket expense that the covered individual has that amount of money disposable sitting in their bank account. Additionally, as you state in your question, that is not a feature of every insurance policy.
There are 30 million Americans with no health insurance coverage, that statistic alone should answer your question
A common misconception is that out-of-pocket maximums cover everything, but that’s not true.
Services that aren’t covered do not count toward the out of pocket maximum. This could even be if a doctor was out-of-network.
Even with insurance, you might rack up huge medical bills.
According to [2017 data from the Census Bureau](https://www.census.gov/data/tables/2017/demo/wealth/wealth-asset-ownership.html), about 19% of households in the US have medical debt. The median debt is $2000 and the mean debt is $12,430, well below the ~$20,000 OOP maximum insurance policies are required to offer. People with debt burdens like this may still go bankrupt.
Keep in mind the people who have above average amounts of debt may be uninsured and/or carrying debt from across multiple years.
Also keep in mind that bankruptcy is relatively rare. Less than 1 million individuals file for bankruptcy every year. Even the aggressive estimate that ~60% of these are due to medical debt could, potentially, be completely made up of the ~30 million people without health insurance coverage.
Insurance doesn’t/won’t cover every health expense.
Also in the recent past, even if it’s a covered expense, that doesn’t mean they pay all of it. A hospital could charge $10k, and the insurance company may decide that the “reasonable and customary” fee is actually $5k, leaving you to figure out how to pay that additional $5k.
I am out of work awaiting disability and have been for some time.
My out of pocket max is 4k per year.
I reached that last year and will again this year.
I make 0 dollars.
This is more common than you think.
Some people fall ill enough that it affects their income and they already make so little they cannot save up anything to cover future costs. MANY cannot afford these “max out of pocket” amounts any more than they can afford much else over their absolute basic needs.
You can have really bad insurance. You might have a deductible that’s like, 3k for family or 1k for individual. And sometimes the medical offices try to collect it when you see them. And then, after that, the insurance might only cover 70% of fees.
* so, once I noticed my nose was swollen. I go to ENT. My copay is 30, but they inform me I still have a 800 balance on my deductible that I have to pay. I tell them I can’t pay it and they try to deny me from being seen. So I call the insurance directly and they say I can pay 400 for now. So I pay 430. Turns out I had cellulitis in my nose. I was so close to leaving that day. I wasn’t making that much so 400 was a lot for me at the time. It’s ridiculous. Mind you I still owed 400 so I had to charge it and pay it off via my credit card.
* another time, again when I made less, I went to the dentist and I needed a root canal and implant. My out of pocket was 800 for the root canal and 3k for the implant. I literally paid 200 a month to the dentist for what seemed like forever- and after a while they started working on my teeth.
* both times my insurance premiums cost 250 a paycheck, before I got a job w the union. So on top of all those fees I was paying 500 a month.
* when I got the union job, insurance had no premium (nothing deducted from pay) the doctors weren’t the best but I never paid as much out of pocket again.
I was fully covered with an incredibly good insurance plan and a stable job when I got sick. I was admitted to the hospital with a life-threatening condition after going to urgent care and being told I needed to proceed directly to the ER. All of my care was in network. When I was discharged, my insurer deemed the entire stay unnecessary and sent me a bill for almost $40,000.
Also health providers pad the bill. We had a supposed covered procedure. Bill for the procedure under insurance was going to be $45K. Insurance denied the claim and it turned out we were actually dropped by the insurance company a week before the procedure (longer story than I want to explain here). Once hospital found out we were paying cash instead of being insured, bill was set at only $8k. So, hospital was padding the bill by $37K to milk the insurance company. Welcome to America!
Because even if you have decent insurance (either through an employer or the ACA):
* Deductible is often a few thousand ($4k for my family)
* OOP max is often significantly more ($6k for us)
* There may be a separate (even higher) deductible for out of network providers. Often providers you didn’t even realize were out of network, like the anesthesiologist who worked alongside the in-network surgeon.
* Health insurance just straight up excludes coverage for some forms of treatment you wouldn’t expect, like… orthotics for flat feet. Some prosthetics are excluded. Or for private/out of network ambulance services. Or, say, that $25k air ambulance ride to get your dying kid to a children’s hospital with equipment that could actually be used for them.
Or maybe you lost your health insurance when you got too sick to work (or because the stress of dealing with a severely ill family member tanked your performance and you got fired), and with no job you couldn’t afford to keep paying the whole premium under COBRA, but you still needed treatment.
Health insurance companies make money off premiums. They lose money every time they pay out on a claim. They have armies of bureaucrats (and computer algorithms) *dedicated* to making sure they deny any claim they can possibly get away with denying, including stuff they’re *supposed* to pay for, but think you won’t have the knowledge, time, or energy to fight them on. They wouldn’t pay that army of bureaucrats if it didn’t save them more money in denials than what said army’s salary costs them.
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ETA2: I think my point there is that their whole business model is based on making money by NOT covering you. How is that different from any other kind of insurance? Well, because in other types of insurance, like home & auto, the company gets to take actuarial data and make a *risk decision* about whether to cover you at all, and they can more freely adjust the premium to account for the risk you present. Health insurers mostly don’t get a choice about who they cover (laws typically require them to cover everybody who can pay the premium, especially since the ACA), and they can only jack the premiums so high to compensate.
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And the healthcare lobby is absolutely gargantuan, and dedicated to preventing legislation that could reign in these practices, let alone any kind of universal coverage. Healthcare spending in the US accounts for almost a fifth of our entire GDP, ffs…
See also: [https://www.cnbc.com/2019/02/11/this-is-the-real-reason-most-americans-file-for-bankruptcy.html](https://www.cnbc.com/2019/02/11/this-is-the-real-reason-most-americans-file-for-bankruptcy.html)
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ETA:
>I guess I’m wondering if there is anyway I can plan to not be in a situation of me or my husband rejecting treatment and dying or having huge medical bills cripple us.
Yeah, there is: Start working on getting Canadian residency now, while you’re healthy.
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