by Alex Skinner

I was a junior in college studying advertising at Brigham Young University. My wife was working night shifts to put me through college and to ensure we both had health insurance coverage.

Those nights were always strange. Being alone in a bed, sometimes being able to sleep, other times thinking about my wife. But this night was different.

I had an overwhelming feeling of impending doom. Something bad was
happening. As I struggled to breathe, sleep became impossible. Each laborious inhale and dissatisfying exhale enhanced the imminent doom.

My wife had the car, our only car. By the time she arrived home it had been five hours of breathless agony. Breathing, I have come to realize, is like a good narrative, when you hit that climax of breath the satisfaction of the exhale is amazing.

Five Hours of a Terrible Narrative

We immediately packed up and got in the car. My wife worried, “Why did you wait so long to tell me, I could have come home.” For some reason Skinners hate putting others out, that is perhaps why my uncle failed to repair his hernia of three years.

Rapid care turned us away… rapidly. Since I said my chest had been tight and my heartbeat erratic they said we would have to go to the emergency room.

After an EKG and a number of tests were run, pleurisy. Likely just pleurisy. It seemed that my lung and chest tissue was inflamed.

Thanking the doctors and nurses we left, ecstatic that all it was was some problems with my lungs that medication could help. After eight hours the nightmare was over.

Until We Got the Bill

Over $11,000 for the emergency room services. Here we are, poor college students with an $11,000+ medical bill. I know this number pales in comparison to serious medical expenses but we were at the ER for two hours.

Because I came in saying there was something wrong with my heart we were admitted at the super emergency rate, which costs extra.

Enter Health Insurance Terms

We had no idea what deductible vs out of pocket maximum meant. At this point in my life I was 25 and my wife 22. Faced with this major bill we had to figure out, “How much are we losing on this?”

Our health insurance coverage was great, so I thought. Great for a healthy person.

What Is “Out of Pocket Maximum?”

At the time I assumed max out of pocket was the most amount of money that one would have to spend on health insurance coverage for an entire calendar year (excluding premiums).

Our max out of pocket was $5,000. We breathed a sigh of relief knowing at most we would only need to pay $5,000 of the $11,000, a savings of $6,000.

We figured this meant that by March of 2015 we had already hit our max out of pocket, so there would be no more to pay the rest of the year.

Deductible Vs Out of Pocket Maximum

This is the point where we learned about coinsurance, deductibles, percentages, and that both of us have our own separate numbers to hit.

A deductible is the total amount of money a person has to pay for covered medical expenses before your insurance will pay the rest or a percentage of it.

Our family (it ended up being individual coverage) deductible was $3,000. Once we paid $3,000 in covered expenses a percentage of all other covered expenses would be covered by insurance.

Coinsurance with My Medical Costs

  • My Health Insurance InformationHow My Bill Worked with my Insurance
  • Deductible$3,000Total Bill$11,670
  • Co-insurance50%$11,670 – deductible ($3,000) = 8,670
  • Max out of Pocket$5,000Co-insurance 50% of 8,670 is $4,335

After the deductible and co-insurance were applied, the portion of the bill I would have been responsible for would have been $7,335 but that’s when the out of pocket maximum kicks in and limits my portion to $5000.

My Wife Needs Medical Care Too

Once we paid $5,000 for all of my individual needs, we had to start paying towards my wife’s deductible plan of $3,000 and her out of pocket maximum of $5,000.

By the end of 2015 we spent $8,432.43 for medical care, all of it necessary. It would have been nice to know about whole life insurance policies at this time. We wiped out our savings to pay for my false alarm emergency room visit and still had to pay for my wife’s medical expenses the rest of the year.

My college courses like Media Planning 217 didn’t seem as valuable as understanding how deductibles vs out of pocket maximums worked. You live, you learn.

Life Benefits Comments:

Alex, we’re glad that all of this ended well. We sympathize with your feelings too, why isn’t this information taught in college, better yet high school?

Why do you think Alex says, “It would have been nice to know about whole life insurance policies at this time”?

One of the benefits to having your “savings” in a whole life insurance policy is that you can quickly access money in the form of a policy loan. Since the money you leverage with a policy loan is not technically your own money, but rather the insurance company’s money, your money continues to grow in your policy. As you know, when you liquidate your savings for any reason, all associated growth stops!

Taking a policy loan to pay for an expense like this even when you have other savings can help give you peace of mind too because you can keep your savings available and take all year or longer to pay back the policy loan at your convenience.

What Do you Wish You Had Learned In School?