It’s payday and you are on your way to the bank to deposit your check. You pull up to the drive through window and give the teller your instructions for your transaction. When you are finished you receive a balance of how much money is in your account.
This number is very important to you, with online banking and spiffy new smartphone apps, there is hardly a time when you don’t have access to such information.
It's important because you always want to know how much money you have, it’s equally important to know how much you could potentially pay for something.
This is the case with your health insurance policy’s out-of-pocket maximum. Your out-of-pocket maximum is the total amount of money you are potentially responsible to pay in the event serious medical treatment is needed.
This amount varies greatly from plan to plan and company to company and is always going to be one of the most important things you should consider before purchasing or selecting a health insurance policy.
How Do You Know What Your Out-Of-Pocket Maximum is?
This amount of money will be clearly labeled in any plan summary or benefit guide you receive. If you are ever unsure about it all you have to do is add up your deductible with your coinsurance limit. These two numbers combine to create your total out-of-pocket maximum.
Why is it so Important?
Just like anything else you buy, a house, a car, an all inclusive tropical getaway, you never finalize the deal until you know exactly how much it costs.
At least I hope you don’t.
While some might argue that knowing your monthly premium payment is sufficient enough information to knowing exactly what the plan costs. That may be true nine times out of 10, however if or when you run into a serious medical procedure you are going to want to know exactly how much of that treatment you are responsible to pay for.
Otherwise you might be grossly unprepared to handle such a serious and unexpected bill.
It is also important to know your out-of-pocket maximum because sometimes plans with a low deductible and coinsurance can have a higher out-of-pocket maximum then a plan with a moderate to high deductible. You will more easily be able to see what plans provide you with the greatest amount of financial protection.
What’s the Bottom Line?
The bottom line is to always know your bottom line with your health insurance.
Otherwise you face being unprepared for one of the most costly financial emergencies possible. Just because you have insurance doesn’t mean you should assume everything will be taken care of for you. Know your policy limits and understand your share of your insurance policy.
Do you know your out-of-pocket maximum? If so, are you happy with it now that you have a better understanding?