This week, I thought I would give some clarification on deductibles co-pays, and out-of-pocket maximums.

I had a client call me this week that did not understand why they were receiving bills, and why their deductible was not met this year.

This particular client had surgery last year. And, you know, the surgery didn’t get billed for months and months well into 2023. The client was under the impression that the charges, deductibles, and all that stuff, went toward the 2023 deductible, which is not the case. The charges go to your deductible based on the date of service. Now insurance only has 180 days to bill your insurance. But even if it carries over into the next calendar year, the services retro back to the date of service.

So, they applied the deductibles, co-pays, and out-of-pocket max to the year that the services were done.

The other question the client had for me was “I know I met my $2,000 deductible, so why am I still getting all these bills?” Well, most plans have a deductible, which means you meet the deductible. Again, it depends on the plan. But when you meet a deductible, usually the deductible is applied to surgeries, sometimes labs, outpatient procedures, in-hospital services, and sometimes even the ER, which means your plan does not usually pay anything until you meet the deductible.

But then you usually have coinsurance.

Let’s use an example.

If you have a deductible plan, the deductible is $2000, and the out-of-pocket max is $9100.
So what does that mean? It means you are on the hook for the $2000, plus additional charges up to $9,100, that you have to pay out of pocket. This is where the out-of-pocket max comes into play. If you happen to have a zero deductible plan, then all the co-pays you’re paying actually are applied to your out-of-pocket max, whereas generally if you have a deductible plan, co-pays often do not apply to your out-of-pocket max.

Not to be confusing, but what I tell all my clients is:

1. When you receive a bill, from a provider, check in your portal with your insurance company, and make sure the claim is processed correctly. Compare what the bill you receive versus what the insurance says you owe. Those amounts need to match.
2. Sometimes the provider doesn’t adjust things and they could send you a bill for more than you actually owe. They cannot charge you more than what the insurance says you owe. Bottom line.
3. Be familiar with your Summary of Benefits. This is about a 10-page document that’s really handy to have in place. When you want to look up and see what’s covered – the co-pays, out-of-pocket max, and in-network limitations, it is all there for you to look at.
4. Also, make sure your doctor’s office charges you the right copay if you do have a copay.
5. Never JUST pay the first bill. You want to confirm the insurance processes the correct amounts and that the amounts match.

If you have any questions or need advice please feel free to reach out to me.