Health insurance plans available on the Idaho Marketplace (ACA plans) and Medicare Advantage plans (MA, MAPD plans) all have an OUT-OF-POCKET maximum. This means medical bills that require you to pay a portion of the costs, such as copays, deductibles or coinsurance, is limited. Once you reach your out-of-pocket maximum amount, you will no longer have to pay anymore toward your bills. However, this requires that you use in-network providers, and that services must be covered by your health plan (i.e. not excluded).
For ACA plans, the maximum amount includes the cost of prescription drugs. For Medicare Advantage plans, the out-of-pocket limit applies only to medical care expenses. A maximum out-of-pocket drug limit, applied through federal regulation, limits drug costs separately. All these out-of-pocket limits apply annually and renew each year, usually on January 1. Let’s look at how this maximum amount works in an example.
EXAMPLE 1:
ACA Example: Jane has an ACA medical plan with a $9000 annual out-of-pocket maximum and a $5000 deductible. She has an annual visit with her doctor and receives a referral for follow-up care for her painful knee. The costs of primary, specialist and MRI imaging on her knee result in $1800, which she pays in copays and coinsurance. She also pays $200 in copays for medications she takes during the year. She and the specialist decide she needs knee surgery. The surgery costs $15,000 in total. Since she already paid $2000, and her deductible is $5000, she will initially pay $3000 to reach her deductible. Then, she will pay co-insurance on the remaining surgery bill balance of $12,000. If her coinsurance is 50%, that coinsurance amount would be $6000. However, she previously paid $1800+$200+$3000, or $5000. Since her out-of-pocket maximum is $9000, she will pay $4000 and reach her maximum. She will not pay the rest of the coinsurance on her surgery. The remainder of the year, the plan will cover 100$ of all medical and drug costs.
EXAMPLE 2:
Medicare Advantage Example: John has a Medicare Advantage plan. His plan includes a $5000 maximum out-of-pocket limit. The plan requires no medical deductible to be met. Due to unexpected pain, John visits the Emergency Room and pays a $100 copay. They run a CT scan, which costs him $300. He receives a referral to a specialist due to a tumor found on the scan. He pays $50 to see the specialist and another $300 on tests. The specialists determines he has a cancerous tumor that requires chemotherapy. They will administer a drug in the physician’s office. The cancer drugs administered in the office do not count as a prescription, and will cost him $500 each time. They anticipate 12 treatments over 24 weeks. Since John already paid $100+300+50+300, or $750, he has $4250 of his out-of-pocket costs remaining. The treatments will cost more than that, but once he has paid the remaining $4250, he will not be responsible to pay any more costs for treatment. This includes no cost for a subsequent hospital stay and other tests. However, when the specialists concludes the cancer is gone an prescribes a prescription maintenance drug, he must pay for that medication until he has met his out-of-pocket prescription drug maximum of $2000.
CONCLUSION:
Be sure to be familiar with the maximum out-of-pocket limits on your health plan. Also be sure to check that care you receive is in-network and approved by the plan. In this way, you can avoid high medical bills and reduce how much you pay for care.