When you purchase a health insurance policy, you want to ensure you have coverage for whatever health event you may experience, paying as little “out of your pocket” as possible. Insurance companies have taken this term and other terms like it and developed coverage for you and your family. While there may be differences between companies, there will always be consistency due to the Affordability Care Act. This comes through metal levels: Bronze, Silver, and Gold. At each level, consumers pay a percentage of their medical costs up to a designated level, their out-of-pocket max.
Through this informative piece, we will explain what this means to you: before, during, and after this portion of your insurance policy.Before we begin, we would like to introduce you to how the parts of insurance play into the out-of-pocket maximum.
What are the Parts of Health Insurance in Texas?
Insurance plans have several pieces that work together to provide you with coverage. We would like to introduce you to a few of them.
Deductible – A deductible is the amount you pay out-of-pocket before your coinsurance begins to pay its portion. It is based on a calendar year and is refreshed each year. They are one of the factors that determine your monthly premium. Generally, the lower your deductible, the higher your premium. The higher your deductible, the lower your premium will be.
Coinsurance – Coinsurance is the cost-sharing portion of your health insurance plan. It begins once you meet your deductible. It is a percentage scale from 50/50 to 80/20, depending on the metal plan and the insurance company you select. You can find details in your Summary of Benefits. You will continue to pay your coinsurance until you reach your out-of-pocket maximum.
Primary Care Physician: A Primary Care Physician (PCP) is the doctor you see for your general care. Some medical plans, like an HMO, will require you to see your Primary Care Physician before seeing a specialist or having other tests done. You may also need to remain within your network of physicians, as with an EPO, or you may not have coverage.
Copay –Copays are fees medical providers charge for an office visit. It is important to understand this fee is often for the visit alone, not the treatment you receive. It can be a flat dollar amount or a percentage and can vary by treatment received, medical event, and plan. However, some medical care may be included in your plan. These can include well check-ups and other preventive services. See your medical plan for details.
Now let’s get into what your out-of-pocket maximum means in relation to it all.
What is Out-of-Pocket Maximum?
After you meet your deductible, the shared responsibility, or coinsurance, portion of your policy begins. You will pay your coinsurance percentage until you reach your insurance policy’s out-of-pocket maximum. This term is much like it sounds; it is the most you will pay out of your pocket for your medical expenses. Much like a deductible, the out-of-pocket maximum has two parts, an Individual and a Family. Both Out-of-Pocket Max limits will be specified on your individual or family health insurance policy. It is usually labeled on your Summary of Benefits just as your deductible portion is: Individual/Family.
What is my Out-of-Pocket Max during the coinsurance phase of my insurance policy?
When paying your coinsurance, you are paying per individual, building toward the maximum dollar amount. With most Blue Cross Blue Shield of Texas insurance plans, the out-of-pocket max is $9100 per individual and $18,200 for a family. If you have a 60/40 coinsurance medical plan, you will pay 40 percent of your medical expenses until you reach your out-of-pocket max of $9100.
What is the Difference Between Deductible and Out-of-Pocket Max?
Both are cost-sharing benchmarks that trigger the next benefit of your insurance policy. A deductible is the amount you must meet for your coinsurance benefit to kick in. The out-of-pocket max is the medical expense amount you are working toward as you pay your coinsurance. The primary difference is that when you reach your out-of-pocket maximum, in most cases, your medical expenses will be paid at 100% for the remainder of the year.
Does everyone on my policy have to meet the out-of-pocket maximum?
The answer is, it depends. You will notice in most policies the difference between Individual and Family deductibles is that the number is usually doubled. For instance, many Oscar Insurance plans will see $8,900/$17,800. If you have four family members, each of them is working toward an individual $8,900 deductible. However, suppose the cumulative total of all four family members reaches $17,800. In that case, they have met their plan’s out-of-pocket maximum, and the entire family will have 100% of approved medical expenses paid for the remainder of the calendar year.
NOTE: The out-of-pocket maximums for 2024 will increase from $9,100/$18,200 to $9,450/$18,900.
Cover Mile can help you find the policy that best suits your needs. You can contact our experienced agents, and we can find the insurance plan that provides you with the out-of-pocket max that fits your current situation.
How Does My Out-of-Pocket Max Affect My Health Insurance?
A health insurance company cannot require that you purchase a plan with a certain out-of-pocket maximum if you have a health issue, nor can they charge extra for providing an essential health benefit. Through the Affordable Care Act, health insurance companies in Texas are mandated to provide the 10 Essential Health benefits. These include:
• Outpatient healthcare
• Emergency services
• Hospitalization
• Pregnancy, maternity, and newborn care
• Mental health and substance abuse disorder services
• Prescription drugs
• Rehab and habilitative services
• Laboratory services
• Preventative and wellness services
• Pediatric, including oral and vision care
Out-of-pocket maximums generally do not vary with network type. HMOs, like Blue Cross Blue Shield of Texas, tend to have the same coverage limits as an EPO. The biggest difference between network types is which provider you can seek treatment from.
Whether you need information on deductibles or out-of-pocket maximums, Cover Mile is available to assist you with understanding health insurance in Texas. We aim to guide you through the purchase process and how to choose the best policy for you and your family. Contact us today.
Frequently Asked Questions
-
Will changing my out-of-pocket max affect my insurance quality?
The type of insurance you have does not equal the quality of service you receive. A high out-of-pocket maximum does not mean lower quality service. Just as having a higher-rated plan with a low out-of-pocket max does not equal superior service. Insurance companies provide the same care regardless of plan level, metal tier, or insurance company you have.
-
Will changing my out-of-pocket max affect my benefits?
Most insurance companies set their out-of-pocket max levels higher to reduce expenses, except for plans that qualify for Cost Sharing Reductions. When you qualify for cost-sharing reduction benefits, you can apply for insurance policies with lower out-of-pocket maximum levels. These policies also provide lower copayments and lower deductibles.
-
What medical expenses do not count toward my out-of-pocket maximum?
For the most part, all your medical treatment will count toward your out-of-pocket expenses. There are a few exceptions. After you reach your 100 percent paid, you will still need to pay premiums, medical treatment deemed unnecessary, and ancillary costs like transportation and parking fees. Other medical expenses that do not apply are those not covered by your medical plan, such as adult vision and dental. Check your policy to see what is covered and not covered as some insurance companies offer these services as add-ons.
