Out of Pocket Maximums

Tidbit Tuesdays Tip: ALWAYS know the ins and outs of your out-of-pocket maximums!

  • Find out exactly what your out-of-pocket maximum is – it’s not always exactly what you think it is!
  • Know the difference between in-network out-of-pocket maximum and out-of-network out-of-pocket costs!
  • Before you pay an out-of-pocket bill, be sure your insurance is paid properly.
  • Co-payments generally do not apply to your yearly out-of-pocket maximum.

It occurs so often that people think, “It says my out-of-pocket maximum per person is $8,000, and for family, it is $16,000, which means if we have a major event, this is all we’re going to pay for it for our care”. Well, that’s not true. Big surprise, this is simply not true. What this out-of-pocket value actually relates to is network benefits; your hospital providers, testing facilities, etc., if they are in-network, then yes, that’s the amount you will be charged for in-network benefits.

Most hospitals utilize out-of-network providers, and you will not know that until you get a bill. You will be responsible for 100% of out-of-network charges by the insurance. You will also be responsible for any non-covered services that the insurance deems “not coverable or not needed”. Even if the doctor recommends a test, if it’s not in their scope of covered services, that will not apply to your out-of-pocket maximum. This fact is also true for your co-payments. Co-payments generally do not apply to your yearly out-of-pocket maximum.

This information gets most people concerned when it comes to true emergencies. Texas has passed a law that says if you have a true emergency, and again, that will be determined by what the fine print says in your insurance policy, but if it is a true emergency, then the bill cannot be more than what you would have paid at an in-network facility. You’re still going to be ‘on the hook for what insurance would have paid. It doesn’t mean necessarily that your insurance is going to pay, but your charges will be reduced because of this.

The other thing to note is that anytime, even if you have in-network benefits, anytime you get a bill from a facility, you should not pay it right away. What you should first do, is make sure that your insurance is paid properly. This is important because it happens all the time when doctors’ offices and facilities bill incorrectly. They use third-party billers which means that they send it out somewhere, they don’t train the people themselves. If the notes are not clear, or there is just human error or they made a mistake, then your insurance will deny it.  In this case, you can contact the facility and have them rebill it correctly and resend it to insurance. I’ve recently dealt with this. They marked one of my client’s bills as a work-related injury and it was not. Their insurance denied the whole $95,000 claim, saying it was work-related. The client had to call the facility and explain what happened and that it was not a work-related injury and to please refile the claim. It is important to explain at this point that the hospital is not going to get paid until they file the claim correctly.

Lastly, it is important for you to know your basic benefits. This means that you can always call the insurance company to clarify why they didn’t pay something. And then once you find out what your true bill is, it’s not even a true balance, but with the balance, they’re saying that you owe, it is now the time for negotiation. (see next week’s blog post for more on this!)

If you have any more questions please feel free to reach out to me, I am more than happy to help!

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