So, I am looking for a new health insurance and I am seeing alot of deductible and Out of pocket but idk how they are different. Like, I understand that prescription and visits go to your deductible but what go to your Out of pocket
In: Other
Answer: Deductible is how much your insurance company wants you to pay first. After the deductible, you often have a “copay”. That’s the portion of medical bills that you have to pay while the insurance company pays the rest. Often, it’s 20% meaning that if you have a $100 bill from a doctor AFTER you’ve met your deductible, you pay $20 and the insurance company pays $80. Your “Out of pocket Max” is the maximum amount the insurance company will make you pay before they start paying 100% of everything.
Say you have a plan where your deductible is $3,000, your copay is 20% after deductible, and your OOP Max is $4,000.
You have shoulder surgery and the bills come to $50,000 total. The first thing that happens is that the insurance company tells the provider “I know you billed $50,000 for this, but the contract we have with you says that you’d be happy getting $12,000 for the work you did so that’s what you’re going to be paid.” That $38,000 reduction is an insurance adjustment and you don’t have to worry about any of that.
Now the bill is $12,000. Your deductible is $3,000 so you have to pay the first $3000. That leaves $9,000 left. With your 20% copay, that means you’re responsible for 20% of the next $5,000 worth of bills to get you from the $3,000 deductible up to paying your $4,000 OOP Max. That leaves another $4,000 owed to the provider but at this point, since you’ve met your OOP Max, the insurance company pays the rest of the bill. So… to sum up:
$50,000 shoulder surgery
– $38,000 insurance adjustment
– $3,000 deductible that you pay
– $1,000 20% copay that you pay (total you have paid = $4,000 or OOP Max)
– $4,000 80% copay that the insurance company paid
– $4,000 100% coverage that the insurance company paid since you met your OOP Max
$0 due.
Plus, for the rest of the plan year, you’ll pay nothing since you’ve met your OOP Max for the year. And yes, I know that’s a low number for shoulder surgery. My wife just had some and the total bills came to $72,000, allowed amount after adjustments was over $18,000.
Latest Answers