What does out of pocket max mean?

May 24, 2008

If an insurance has a $1,500 out of pocket max for you but only covers part of the surgery, how does that work? I'm confused.

Jennifer77 · May 24, 2008

That is how much money you are allowed to be charged in a calendar year before your insurance will cover at 100% of the "allowable rate" (how much the Dr. is contracted to receive from the insurance company and you. Usually it's way less than the actual cost). This amount does not include your deductible. My out of pocket is $2500 with a $250 deductible, but I have BC of california and they don't cover for the after care so my Doctor also charged me a "Fee" to cover all the other parts of the procedure that my insurance doesn't cover. I can still choose to attempt to submit to my insurance and get reimbursement from them, but that's just not going to happen.

Dr's actually end up eating a lot of the cost for procedures because they would rather have the contracts with the insurance companies and get paid less than be cash only providers. They at least have some guaranteed payment from the insurance company even if it isn't enough to cover the actual cost of the procedure. Sadly because a lot of patients don't understand their insurance contracts they don't understand that they still have to pay what they are responsible for. A lot of the times they just don't pay. That's why a lot of surgery centers (the one I work at included) charge up front before the procedure. They are all getting stiffed by patients that just don't understand their responsibilities.

When you get your explanation of benefits (EOB) don't freak out at what the Dr. Submits as the charge for the insurance. ONLY look at what the insurance says is your responsibility. I have EOB's where the Doctor has submitted for blood tests in the amount of $600 but the contracted rate with my insurance is actually only $40 and my responsibility is only 20% of the $40. So of course for my $600 blood test I am only paying $8. EOB's can cause people to freak out, but don't. Wait till you get the bill from the Doctor and compare it to what your EOB says you should pay. If they aren't the same then call your Doctors billing office and ask them why. They should lower it to your insurance responsibility and if they don't then report them to your insurance and they can loose their contract and get charged with Fraud. Keep on top of all your statements and keep all your EOB's for your records.

Alexandra · May 24, 2008

This amount does not include your deductible.

Good explanation! But it isn't necessarily true that the OOP doesn't include deductible. It all depends on what your contract actually says. In most cases that I'm familiar with, the out-of-pocket (OOP) max actually DOES include all expenses except prescription copays.

As with all insurance questions, your best resource is YOUR insurance carrier. Call member services and ask them your questions, write down the answers and keep track of who told you what.