Out of pocket max vs deductible are relevant terms that are frequently seen or heard by health insurance policyholders. To clearly discern between each term and state clearly the differences between them, this article contain a summary juxtaposition in the light of out of pocket max vs deductible.
The general belief is that once you become a policyholder for a health insurance, you don’t have to pay any medical bills. This is because all your medical bills will be paid by the insurance company. However, this doesn’t truly go the way as portrayed by the general belief about health insurance.
Going further, there’s more explanation on the terms— out of pocket max vs deductible!
What Is A Health Insurance Deductible
The health insurance deductible is the cost that is required for you to pay or spend on your covered healthcare services, before the health insurance plan itself begins to cover any of the cost related to your health care and treatment. This money is in addition to the monthly premium just for you to be on the plan.
Generally— or technically, most insurance plans have a deductible plans. This is in addition to either individual and employer health insurance plan. Although, there’s a slight different on the amount to be paid depending on how high or low the premiums are.
Mostly, the higher the premiums, the lower the deductible. On the other hand, the lower the premiums, the higher the deductible.
However, this doesn’t apply to all as some Health maintenance organizations plans offers include low deductible or no deductible at all.
Now, let’s consider Out of pocket maximum!
What Is An Out Of Pocket Max/Maximum?
Out of pocket max is the exact limit the policyholder must pay for healthcare services before the insurance plan will then cover all further healthcare expenses that are eligible for that year.
Noteworthy, this amount of money does not include the cost of the plan premium and the health insurance plan will not cover your healthcare expenses until the policyholder reaches the amount.
Out Of Pocket Max vs Deductible
Considering out of pocket max vs deductible, the difference might seems a bit convincing or both terms seems similar. However, there’s a clear difference between out of pocket maximum and deductible.
Literally, a deductible is no more than a cost a policyholder pays on health care before the insurance itself starts covering any health expenses, WHILE an out of pocket maximum is the amount the policyholder is required to spend on eligible health expenses before the health insurance itself starts covering all covered expenses.
Noteworthy, in the latter, the expenses the policyholder must spend on eligible healthcare expenses can be either through copays, deductibles or coinsurance.
In furtherance, a clear scenerios from a book by David Belk, Trust Cost of Health Care gives more clarification on the terms— out of pocket max vs deductible!
“For example, a person might have a $2,000 deductible and a $5,000 maximum out-of-pocket. They might get $10,000 worth of medical care for, say, a hospitalization, surgery, and post-operative care. The first $2,000 is paid entirely by the patient. After that, the patient might have to pay either a fixed copay—$20, $50, $100 determined in advance by the insurance company, and depending on the service—or a percentage of the total payment for each covered service, which is a coinsurance.”
Once the total of that person’s copays and coinsurances plus their deductible has totaled $5,000, they owe no more money that year for any of their medical care because their insurance will cover all further costs.”
Having considering the following explanation on out of pocket max vs deductible, in addition to the above citation, it’s believed you would be able to discern what out of pocket max is and what deductible is.
This will also serve as an added knowledge when you are considering to apply for a health insurance plan.