[Health Insurance] What is the difference between "deductible" and "maximum out-of-pocket expense limit"?

Question

[Health Insurance] I dont exactly understand how both the terms apply to my expenses towards a medical care. I am talking about Physican and Hospital Services in particular, rather than Preventive Care.

Answer 1

"Deductible" means the initial "out of pocket money" you must spend before an insurance company pays anything towards a claim. "Maximum Out-of-pocket expense limit" or "Stop Loss" is the maximum that can come out of your pocket during any claim.

You have to be careful with both. These deductibles can be "per claim" or "per year". In the case of medical insurance, the deductibles and stop losses are usually per year. That means that if a claim carries over into another fiscal year, you would incur yet another deductible and stop loss limit.

For example, let's say that your medical claims total out to be $25,000. If you have a $250.00 deductible and a $2,500.00 stop loss, the claim would be paid as follows:
The first $250.00 comes out of your pocket, leaving $24,750.00
If the contract is an 80% contract, then the insurance company would pay 80% of the $24,750.00 or $19,800.00 which would ordinarily leave you with a pocket expense of $5,200.00. But since you have a "Stop Loss" of $2,500.00, the insurance company would pay another $2,700.00 (depending on the contract). Sometimes, they would pick-up the deductible also.

Answer 2

The numbers I am using are made up and are not intended to be the real insurance cost. Each policy will be different. If you are not an American, I apologize for talking in dollars instead of the currency of your country. The concept remains the same. Deductible is the amount you will pay each time you go to the doctor or to the hospital. It may be a set amount, like $15.00 or it may be a percentage of that days bill, say 20 percent. The maximum out of pocket expense limit is an amount the insurance will collect from you annually before they pick up 100 percent of your medical cost for the remainder of that year. This is usually a fixed dollar amount. If you go to the doctor or hospital frequently, your deductible may reach the maximum out of pocket expense quickly (say $2,000.00 for the year) and the insurance will pay all medical expenses after this, for the rest of the year. If you don't go to the doctor often, you may not reach the $2,000.00 limit for the year. Always ask lots of questions from the company you are considering.

Answer 3

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RE:
[Health Insurance] What is the difference between "deductible" and "maximum out-of-pocket expense limit"?
[Health Insurance] I dont exactly understand how both the terms apply to my expenses towards a medical care. I am talking about Physican and Hospital Services in particular, rather than Preventive Care.

Answer 4

your deductible is the amount you have to pay during one year before your insurance company will start paying their portion of the bill. maximum out-of-pocket expense is the most $ you will have to pay during one year. i'll give you a hospital-related example:
your insurance requires a $750 deductible and pays 80% of your bill after the deductible is met. your maximum out-of-pocket expense is $2000. let's say you have a blocked artery in your heart that requires a stint, and the estimated bill is gonna be $10,750. 1st you pay your $750 deductible. normally, insurance would now pay 80% of the bill leaving you with $2000 to pay. but since you have a $2000 maximum out-of-pocket expense, you will only pay $1250 of that portion (since you have already paid $750). as long as any proceeding medical problems are covered by your insurance, you will not have to pay anything for the rest of this year of coverage.

Answer 5

deductible is how much you have to pay, before the insurance kicks in.

AFTER you've paid out your whole deductible, usually you keep paying 20% of the bill . . .sort of a co-pay, until you reach a set amount, the "max out of pocket". Then the insurance pays 100% until the limits run out.

Example, $500 deductible, Max OOP $2500 . . . you pay the first $500, Then you have another $100,000 of bills. On the first $10,000, you pay your 20% copay, but now you've paid out $2500 total, so you don't pay out the 20% any more.

Answer 6

Stop Loss Limit Insurance

Answer 7

Deductable is what you'll pay up front. Maximum out of pocket is supposed to be the most you'll pay from your pocket in a calander year. There are always strings attached.

Answer 8

Deductible and out-of-pocket expense (aka co-insurance) are similar in that they are money that you have to pay first before the insurance kicks in.

Answer 9

Ask your HR, they will know.