When you run your California health insurance instant quote, one of the columns in the resulting proposal will be Lifetime Maximum. This is an important part of your health plan and can quickly distinguish between a trustworthy health carrier and one that you may want to avoid. The major health carriers usually have lifetime maximums in the millions of dollars (usually 5 or 6 million) so if a carrier's plan has $1,000,000 or a lesser amount, it's probably best to avoid them. Let's take a look at the lifetime maximum in more detail to see why.
First, what's the official definition of a Copay:
Lifetime
maximum
benefit
(sometimes
referred as
lifetime
limit)
A
dollar limit
on how much
the
insurance
company will
pay in your
lifetime.
An insurer
may, for
example,
cover up to
$5 million
over your
lifetime.
Above this
they will
pay nothing.
More detail on the lifetime maximum
So it is a fixed amount that the carrier will pay up to during the lifetime of an enrollee (even over multiple, spaced-out polices). The lifetime maximum is usually per person in a family. There is a distinction between HMO and PPO plans with most carriers. Usually, PPO plans have a dollar amount such as the 5 or 6 million per person that was mentioned above. For HMO plans, however, it is not uncommon to have an unlimited lifetime maximum. Obviously, the higher the lifetime maximum, the better but truly catastrophic health conditions would be hard pressed to run even $1,000,000. Open heart surgery probably runs about $100,000 so you can see that $5,000,000 is more than adequate. At that point, you are just happy to be alive if you're even getting close to the maximum. On the flip side, a $100,000 lifetime maximum is not a good option. The whole point of health insurance (especially in today's medical climate), is to cap your risk or liabilities for a truly catastrophic situation. If you have $250,000 of medical expenses and the lifetime maximum is $100,000, that leaves you out of pocket for the additional $150,000. What's the point of having health insurance. Granted, the odds of having these large bills are very low but invariably, it does happen each year to a percentage of all plan enrollees.
Most carriers tend to standardize their lifetime maximums which means that this element of the plan design is the same for any of their plans except for the HMO - PPO difference described above. Usually, all their PPO plans have the same lifetime maximum benefit so it doesn't factor as strongly into choosing which plan is the right fit for you. It does factor into which carrier is right for you and this benefit is a great way to eliminate sub-par carriers. Any carrier worth their weight will have a lifetime maximum in the millions.
The maximum is the amount that the carrier pays out of pocket. This does not include the deductibles, copays, co-insurance, etc that you are contributing as well. Your total medical bills may actually be much higher than the maximum when you take into account your out-of-pocket as well. This lifetime maximum is a separate number from your annual maximum which caps YOUR exposure for in-network and covered benefits during a calendar year. The two are mutually exclusive. The annual max protects you while the lifetime max protects the carrier. Again, this is very rare but in today's escalating cost environment and increasingly sophisticated technology landscape, it's not impossible to think that the maximum might be increased by the carriers going forward. For now, it is just a good litmus test for a carrier's strength and stability and a distinguishing piece to help choose the right plan.
Other important concepts to help you understand your health insurance quote are:
Co-insurance
Deductible
max out
of
pocket
To
run your
instant
health
insurance:
California
Individual
Family
health
insurance
quote
California
Small
Group
health
insurance
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