Here’s how the plan might work for a patient we’ll call Mr. California.
January: He wakes up with a fever and a terrible sore throat. He goes to his internist ($45, not subject to deductible), who orders a lab test ($45, not subject to deductible) that shows he has strep throat for which he is prescribed a generic antibiotic ($25, not subject to deductible).
- $0 towards the medical and drug deductibles
- $115 into the OOP bucket, $6,285 left
March: He starts to wheeze during his morning run. He goes to an allergist ($65, not subject to deductible), who diagnoses seasonal allergies and prescribes a brand-name inhaler ($100, subject to separate drug deductible).
- $100 towards the brand-name drug deductible, $150 left.
- $0 towards the medical deductible
- $165 into the OOP bucket, $6,120 left
June: During a game of beach volleyball, he lands awkwardly on his knee and it blows up. He goes to an orthopedist ($65, not subject to deductible) who sends him to have an MRI of his knee ($1,500, subject to deductible). He goes back to the orthopedist ($65) who informs him he has torn his ACL and needs a surgical repair.
- $1,500 towards the medical deductible for the MRI, $500 left
- $1,630 into the OOP bucket, $4,490 left
July: His bill for the surgery is $25,000 from the hospital and $7,000 from the doctors who treated him there. He pays 20 percent ($1,400) of the doctors’ fees (not subject to deductible)
- $1,400 into the OOP bucket, $3,090 left
He pays the last $500 of his medical deductible towards the hospital bill, leaving a balance of $24,500.
- $500 into the OOP bucket, $2,590 left
His 20 percent coinsurance for the $24,500 balance on hospital bill comes to $4,900. But he pays only the first $2,590 of that, at which point the OOP bucket is full. The insurance company pays the rest of the bill.
July-August: Six rehab sessions for his knee. The insurance company pays the entire bill.
October: His seasonal allergies return. The insurance company pays 100 percent of the cost for another allergist visit and a new inhaler.
As you can see, the only reason Mr. California hit his out-of-pocket maximum was that whopping bill for his ACL repair. If you are reasonably healthy with only minor complaints, you won’t use it up in a year. But it’s critically important for protecting you from crushing cost-sharing if your luck runs out and you do need expensive care.
It's also important to know that if your income is on the low side, you may qualify to buy special Silver plans with much lower out-of-pocket costs.
Got a question for our health insurance expert? Ask it here. It helps if you include the state you live in.