You know what you might pay for your health insurance premium--a fixed, monthly cost. But what about the rest? What will you actually pay for health care next year? Will you pay just your Monthly Premium or will you pay your full Maximum Out Of Pocket Cost? $1200, $5200, or something in between?
Best Case Scenario
One way to think about health insurance is to imagine the Best Case Scenario. Imagine that you have a year where you are healthy, and nothing goes wrong.
In this scenario, you pay:
Your Premium: $100/month for a subsidized silver plan
Annual doctor's visit (preventive care, covered 100%): $0
Flu shot (preventive care, covered 100%): $0
Birth control pills (covered 100% under the ACA): $0
TOTAL COSTS FOR THE YEAR: $100/month premium x 12 months=$1200
Worst Case Scenario
Now imagine that you have a year where everything goes wrong. You start out the year with appendicitis, then you fall and break your arm, you have a cancer scare, Lyme disease, and you are hospitalized for pneumonia. You might be wondering--if you have a year like that--what is it going to cost? What is the Worst Case Scenario--not for your health, but for your budget?
Actually, it's not that hard to figure this out either--there is a mathematical formula for it.
Start with the cost of your premium.
We'll use the same premium: $100/month for a subsidized silver plan.
Your deductible is $2000, but that turns out to be more important (in a worst case scenario) for the pace at which you pay bills, and less important for the actual Worst Case Scenario.
What is important is the line marked Maximum Out Of Pocket Costs. We'll say, in this case the Maximum Out of Pocket number is $4,000. Once you spend that maximum number, you pay nothing more.
TOTAL COSTS FOR THE YEAR= Total premium cost + Maximum out of pocket amount
In this scenario, you would pay: ($100/month)*12 + $4000 = $1200 + $4000 =$5200
So with this plan, under the best case scenario you would pay $1200 and under the worst case scenario you would play $5200. Try out these formulas on any plan.
Just one caveat: In some cases, the maximum out of pocket number applies only to in-network spending; or out-of-network spending may be subject to a higher maximum out of pocket number. Except for emergencies, try to stay in network.