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Medical bill struggles can arise even with an out-of-pocket max

Among the reasons people get health insurance is to provide themselves with financial protections in the event they suddenly end up facing significant medical costs. There are a variety of such protections such insurance contains. One are out-of-pocket maximums.

This is a limit on how much in out-of-pocket costs a policyholder can be assessed in a year in relation to covered expenses. Once this limit is hit, the insurer is supposed to cover 100 percent of the remaining covered expenses for the year.

Having such caps is mandatory under the Affordable Care Act. Federal law also restricts how high an out-of-pocket maximum can be set.

Now, such caps do not mean that individuals covered by health insurance are immune to experiencing medical bill struggles. There are multiple reasons for this.

One is that it is still possible for an insured person to face out-of-pocket medical expenses that exceed this cap in a year. This is because there are some expenses the cap may not apply to. For example, the cap generally does not apply to costs related to out-of-network services. What specifically is or is not covered under the cap depends on the terms of a person's policy.

Also, expenses that fall below the level of the out-of-pocket max of a policy could still be high enough to create financial difficulties for a person.

As this illustrates, instances can arise in which the protections an insured individual has from their health plan are not enough to ward off struggles with medical bills. When this occurs, a person might find a different type of protection helpful: bankruptcy protection. For example, a person may be able to get overwhelming medical debt discharged through a Chapter 7 bankruptcy. Skilled bankruptcy lawyers can help answer questions individuals struggling with medical debt have about whether bankruptcy would be able to help with their debt situation.

Source: Reuters, "What to do when a health crisis pushes you over the limit," Beth Pinsker, Oct. 25, 2016

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