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“Max Out of Pocket”, what does that even mean?!?

By January 31, 2020May 20th, 2021Employee Benefits

“Ok, Insurance lady, you just showed me a higher deductible plan than the one I had last year, yet, tell me it’s no different than my current plan because I am not spending any more money out of my pocket? How is that even possible!?! Good grief, no wonder why people don’t like insurance or the people who sell it.” ______________________________________________________________________

Oh goody, I am glad you asked, but first let me ask YOU some questions. When you hear the word “deductible” what do you immediately think? What terrifies the living crap out of you when your deductible increases on your health plan at renewal? If you are like most people, it is some HUGE illness (like cancer) or accident (like breaking bones or hospitalization due to a vehicle accident). Basically, big ticket items, that could financially ruin most people.

Here is a truth bomb that a lot of people still do not know or understand about their health plan:

  • Deductibles are good to know and understand on your health plan, but what is MORE important to know and understand is your “max out of pocket”….you know, the second set of numbers that are typically listed on your benefit summary after the deductibles. Yeah, the ones that people overlook to get to the doctor copay’s and prescription costs.

Quick explanation (with an example – you’re welcome):

  • Max Out of Pocket is LITERALLY the max that you will pay out of pocket for medical expenses for the year – this includes ALL your copay’s for everything! Y’all, this is your “worst case scenario year”, period, end of story!!!
  • Example:  Deductible $3,000 and Max out of Pocket is $5,000, your TOTAL cost (that you will pay) is $5,000 (this includes the $3,000 you already paid for your deductible). So, after you meet your deductible, you are still responsible for paying the additional $2,000…make sense? Many people get angry when they keep getting bills for payment after they have met their deductible…Why? BECAUSE YOU AIN’T DONE PAYING!

So from now on, just go ahead and skip over the “deductible” part and go straight to the “max out of pocket”…why?  Because it doesn’t matter if your deductible is $1,000 or $3,000, if your max out of pocket is $5,000 on either plan…you are going to pay the EXACT SAME amount…there are 2 differences that may help you decide:

  1. How you get to that max out of pocket (via coinsurance….I’ll cover that in another blog later…the waiting in suspense will be intense, I know).
  2. How much per pay period it will cost you for the plan…another little insider tip: if you have the same max out of pocket between 2 plans, the one with the lower deductible will cost you more, so choose wisely.

The saying goes, “You don’t know what you don’t know”…well, now you know, you can take control of the plan you are participate in because IT JUST AIN’T THAT DANG COMPLICATED!

#insurance #Highpoint #HighpointInsurance #Itaintthatcomplicated #maxoutofpocket #themoreyouknow #takecontrol

Insurance Lady, Erika Ensign