If an out-of-pocket maximum is $3,500, and you get a hospital bill for $10,000, do you only have to pay the $3,500, or the full $10k?
After you meet the deductible and out-of-pocket max, is care essentially “free” the rest of the year since you don’t have to pay out of pocket?
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It works in a couple of steps. First is your deductible. That’s how much you pay before your insurance pays for anything.
To use my health insurance as an example, I have a $1,500 deductible, and a $4,000 max out of pocket. With 60% coverage.
This means if I had a hospital bill that cost $10,000, my first $1,500 would be completely my expense. After I pay $1,500, insurance will pay for 60% of the cost, until I hit my max out of pocket. So that means I’d pay another $2,500 and insurance would start to pay, and they would pay $0.60 for every $0.40 I spent. So they would pay $3,750. At this point I’ve paid for $7,750. Any medical expenses beyond that are 100% covered by my insurance for the remainder of the calendar year. So the last $2,250 on that bill would be 100% covered.
If I then went on to have another ER visit 4 months later, but in the same calendar year, the insurance would cover 100% of that cost also.
However, if I hurt myself and spend New Years Eve in the hospital, and then get surgery new years day, those two events are in two different years. So the “out of pocket” amount resets. And I’d likely pay quite a bit more than the $4,000 max out of pocket for that one instance.
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