I hear it almost daily..."I'm healthy - what do I need health insurance for??
The average person lands in the hospital every seven years. Almost 50% of bankruptcies in the U.S. are the result of a sudden medical condition or accident...and believe me...they were all probably "healthy".
There is a double-edged sword in today's medical world. Improvement in medical technology and capability is unprecedented with even further developments around the corner through new genetic advancements. All this is great but as the capabilities increase so do the resulting costs. The possibility for the large medical bill is really why you need health insurance and this should be ultimately what your plan protects against.
Maximum out of Pocket
Most plans handle this Big What-if with a "maximum out-of-pocket", quite possibly the most important part of your medical plan.
It basically means, if you have a big bill (or a series of bills) when does the plan pay at 100%. Of course, this maximum applies to in-network (see Section 1 Doctor doctor) and for covered benefits. It usually applies to a calendar year, from January to December after which it is reset. Typically, the Maximum includes deductible (we'll talk about the deductible in the next section - small bills).
For a simple example...
You have a $2,250 deductible and then a 10% co-insurance up to another $500 maximum. The unforeseen "what-if", a car accident occurs with $80,000 of covered, in-network medical bills. After you have paid $2,750 (your $2,250 deductible and $500 max), then the insurance carrier will pick up the rest of the bills according to your covered benefits.
An interesting fact...
Sometimes plans have great benefits for smaller bills but the "back-end", meaning the big bill is not as good. What good is a $45 doctor office visit copay if you have to pay $5,500 for a big bill?!? Remember, this "back-end" is really why you are buying health insurance. If you are getting better benefits for the small bills...guess what...you are probably paying for it in your monthly premiums. That being said, let's look at how the plans handle the small bills.
Pennies on the nickel?? Understanding how plans treat the smaller bills from doctor visits to minor surgery... Next Page - Small bills