You will sometimes see this referred as Out-of-Pocket Maximum, Copay Maximum, or Max out of Pocket depending on the health carrier. They all mean the same thing. They let you know how much you will have to pay in a catastrophic health situation up to your lifetime max (which is usually in the millions...or should be if you are dealing with a reputable carrier).
The max out of pocket is probably the most important part of your policy and hopefully you'll never see it. It essentially caps out your liability for the Big What If. Health care costs have risen at significant rates for the past decade and will likely continue. Simple procedures such as an ACL repair (very common knee surgery) can run $15K to $20K. Cancer treatment can runs 10's to 100's of thousands. This is really the reason to have health insurance. Let's dig a little deeper to understand how it works and make sure you choose a California health plan that addresses this need well.
First, with most health plans, you pay a deductible first, afterwhich you then start to share costs with the carrier until you hit your max out of pocket. It's important to use in-network PPO providers with a PPO plan otherwise you can actually pay more out of pocket. For example, let's say your Max out of pocket is $5000 and you have a $20,000 elective surgery (covered benefit) at a non-participating hospital on a non-emergency basis. The contracted PPO rate for that procedure may be $12,000. In this case, you will pay your $5000 (max out of pocket) and the difference of $8000 between the allowed negotiated PPO rate and your hospital's charge. So you will be looking at $13K out of pocket in stead of the $5K. Stay in-network to keep your max out of pocket down.
The out of pocket max is per person for a policy with multiple family members except for HSA (Health Savings Account) plans. You will typically see a "2 member max" clause by the max out of pocket amount. This means that if two people on a family policy meet their max out of pocket, the other family members do not need to. This protects from catastrophic situations in which many family members have significant bills in one year. The HSA's have a cumulative max out of pocket. The entire family is all working towards one family max.
Once
your max
out of
pocket
is met,
you
should
have
very
little
out of
pocket
for
covered
benefits,
in-network.
You also
have a
lifetime
max
which is
usually
around
$5
million
for PPO
plans
and
typically unlimited
for HMO
plans.
Be
careful
of plans
where
they cap
benefits
such as
hospital
daily
charges
or
annual
benefits.
You will
not find
those
types of
plans on
this
site
because
they can
create
enormous
financial
consequences
for a
subscriber
with
large
medical
bills.
Some
carrier
include
the
deductible
as part
of the
max out
of
pocket,
while
others
apply
the
deductible
in
addition
to the
max out
of
pocket.
Officially,
the Max
should
cap
copays
and
co-insurance
but the
inclusive
type
works
much
better.
Other important concepts to help you understand your California health insurance quote are:
Co-pay
Co-insurance
Deductible
To
run your
instant
health
insurance:
California
Individual
Family
health
insurance
quote
California
Small
Group
health
insurance
quote
