How Does My Out-of-Pocket Maximum Affect My CPAP Prices?

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If you have reached your out-of-pocket maximum for the year on your health insurance plan, this is by far the best time to stock up on any DME (CPAP supplies in this case) that is offered on your insurance schedule.  For more information about how often a certain CPAP product is covered by most insurance companies check out our CPAP Reimbursement Schedule.

Once you have reached your out-of-pocket maximum, medical expenses will be entirely covered by your insurance company.  To figure out why this is the case, lets delve into what an out-of-pocket max is, and how it interacts with other variable rates in your insurance plan.

What is an Out-of-Pocket Max?

Out-of-Pocket Maximum – This is the maximum amount that you can pay for eligible, in-network healthcare costs in an insurance benefit year.  This amount is the sum of the amount you spend on your deductible and coinsurance.  The out-of-pocket max does not include your premium payments.  If you use an out-of-network provider, there is a separate annual out-of-pocket max, and it is usually higher (it almost always more financially beneficial to use an in-network provider).

Examples

Patient Information

Deductible Information Patient

Name: King Arthur

Insurance Provider: Aetna

Deductible (In-Network): $3,000.00

Co-Insurance Rate (In-Network): 20%

Out-of-Pocket Max: $5,000

Product Overview

resmed-airsense-10-cpap

Product: ResMed AirSense 10 AutoSet CPAP with HumidAir Humidifier

Manufacturer: ResMed

HCPCS Code(s): E0601, E0562, A9279, A7037

Price: $883.00

Out-of-Pocket Max is Not Met (Deductible has been Met)

Arthur’s deductible has been met, but he will not spend enough after paying the co-insurance price to reach his out-of-pocket maximum.  He needs to spend an additional $2,000 after the $3,000 deductible in order for the out-of-pocket max to kick in.

Price of Product: $883.00

Amount Arthur Pays (Out-of-Pocket): $883.00*20% = $176.60

Amount Arthur’s Insurance (Aetna) Pays: $883.00*80% = $706.40

Arthur’s Insurance Status Before Purchasing a CPAP Machine

Deductible (In-Network): $3,000.00

Out-of-Pocket Max: $5,000.00

Deductible Met: $3,000.00

Out-of-Pocket Max Met: $3,000.00

Deductible Remaining: $0.00

Out-of-Pocket Max Remaining: $2,000.00

Arthur’s Insurance Status After Purchasing a CPAP Machine

Deductible (In-Network): $3,000.00

Out-of-Pocket Max: $5,000.00

Deductible Met: $3,000.00

Out-of-Pocket Max Met: $3,176.60

Deductible Remaining: $0.00

Out-of-Pocket Max Remaining: $1,823.40

In this example Arthur’s deductible has been met, but he will not spend enough after paying the co-insurance price to reach his out-of-pocket maximum.  This means he is still paying the co-insurance rate of 20% ($176.60) for the CPAP machine.  His out-of-pocket maximum remaining is decreased by the amount of this purchase.

Out-of-Pocket Max Partially Met

Arthur’s deductible has been met, and he will spend enough after paying the co-insurance price to reach his out-of-pocket maximum.  This means his out-of-pocket maximum pricing will kick in, lowering the amount he pays to below the co-insurance rate of 20%.

Price of Product: $883.00

Amount Arthur Pays (Out-of-Pocket): $883.00*20% = $176.60 – $76.60 = $100.00

Amount Arthur’s Insurance (Aetna) Pays: $883.00*80% = $706.40 + $76.60 = $783.00

Arthur’s Insurance Status Before Purchasing a CPAP Machine

Deductible (In-Network): $3,000.00

Out-of-Pocket Max: $5,000.00

Deductible Met: $3,000.00

Out-of-Pocket Max Met: $4,900.00

Deductible Remaining: $0.00

Out-of-Pocket Max Remaining: $100.00

Arthur’s Insurance Status After Purchasing a CPAP Machine

Deductible (In-Network): $3,000.00

Out-of-Pocket Max: $5,000.00

Deductible Met: $3,000.00

Out-of-Pocket Max Met: $5,000.00

Deductible Remaining: $0.00

Out-of-Pocket Max Remaining: $0.00

Since this purchase caused Arthur to spend $5,000 in deductibles and co-insurance payments this year, his insurance company will cover 100% of the in-network medical expenses that exceed his out-of-pocket max.  In this case, that was $76.60, leaving him paying only $100 for a machine that costs well over 8 times that much.

Out-of-Pocket Max is Met

Before Arthur purchases this machine, he has already reached his out-of-pocket max due to other medical expenditures earlier in the year.  This means his insurance company will cover 100% of the price of the machine.

Price of Product: $883.00

Amount Arthur Pays (Out-of-Pocket): $883.00*0% = $0.00

Amount Arthur’s Insurance (Aetna) Pays: $883.00*100% = $883.00

Arthur’s Insurance Status Before Purchasing a CPAP Machine

Deductible (In-Network): $3,000.00

Out-of-Pocket Max: $5,000.00

Deductible Met: $3,000.00

Out-of-Pocket Max Met: $5,000.00

Deductible Remaining: $0.00

Out-of-Pocket Max Remaining: $0.00

Arthur’s Insurance Status After Purchasing a CPAP Machine

Deductible (In-Network): $3,000.00

Out-of-Pocket Max: $5,000.00

Deductible Met: $3,000.00

Out-of-Pocket Max Met: $5,000.00

Deductible Remaining: $0.00

Out-of-Pocket Max Remaining: $0.00

Since Arthur has reached his out-of-pocket max, he gets his $883.00 CPAP machine for FREE!

Health Sqyre works with your insurance plan to all this fancy math so that you don’t have to.  If you would like to see how much CPAP supplies will cost you today, sign up for free!

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