California Property & Casualty Broker-AgentHealth InsuranceEasy
A client is reviewing their health insurance options and is particularly concerned about out-of-pocket costs for unexpected medical emergencies. They want a plan that limits how much they will have to pay for covered services in a given year. Which feature should they look for?
- ADeductible
- BOut-of-pocket maximum
- CCopayment
- DPremium
Show answer & explanationAnswer & explanation
Correct answer: B. Out-of-pocket maximum
The out-of-pocket maximum is the most a policyholder will have to pay for covered services in a plan year. Once this limit is reached, the insurance company pays 100% of additional covered costs.
Why the other options are wrong
- A. A deductible is the amount the insured must pay before the insurer starts paying for covered services.
- C. A copayment is a fixed amount paid for a covered service at the time of service.
- D. A premium is the regular payment made to the insurance company to keep the policy in force.
Out-of-Pocket Maximum
The most an insured person will have to pay for covered medical expenses in a policy year. After this limit, the insurer pays 100% of covered costs.
- Caps annual spending for the insured.
- Includes deductibles, copayments, and coinsurance.
- Does not include premiums or non-covered services.
Memory trick: Don't let medical bills drain your wallet, an 'Out-of-Pocket Max' is your financial shield.