What’s The Difference Between Deductible and Out of Pocket Maximums
                     What’s The 
Difference Between 
Deductible and Out 
of Pocket 
Maximums?
• It’s generally a pretty useful thing to be able to 
confidently explain terms like “deductible” and 
“out-of-pocket costs” to your patients in the 
healthcare industry, as these are terms that 
have a fairly significant impact on their overall 
financial planning and health insurance plan.
• Subsequently, if they’re not kept in the loop and 
don’t really know what these mean come the 
time they need to pay for the services you’ve 
rendered, they’re not exactly going to think 
highly of your practice as it comes across as 
slightly unprofessional on your behalf.
Understanding Health 
Insurance Basics
• Kicking things off, let’s start with some of 
the basics. Health insurance, as you 
probably already know, is a contract 
between the patient and their health 
insurance company in which they pay a 
monthly premium for the assurance that 
any medical care they receive will be paid 
for on their behalf.
Deciphering Deductibles
• Now, obviously, health insurance plans like this 
are lifesavers for millions of Americans across 
the country given how insanely expensive 
covered health care services can be – but that 
doesn’t mean there aren’t still some out-of-
pocket expenses that the patient might need to 
pay before there health insurance plan begins 
paying the bulk of it, and this expense is known 
as a health insurance deductible.
• For instance, if your plan has an annual 
deductible of, say, $700, this is the amount the
    patient is going to have to pay in medical expenses 
before their insurance starts covering extra costs – 
which there’ll certainly be no shortage of.
Understanding Out-of-Pocket 
Maximums
• On the other hand, though, the out-of-pocket maximum 
is basically the most a patient will ever need to pay for 
covered services in a plan year, so once they’ve actually 
hit this limit, their insurance company won’t make them 
pay anymore (in things like deductibles and 
copayments), so they’re not completely overwhelmed 
with healthcare costs for the rest of the year – with the 
exception of their monthly premiums, of course.
Distinguishing Between the 
Two
• So, to reiterate, deductibles are basically the initial 
amount the patient has to pay before their insurance 
properly kicks in, while out-of-pocket maximums are 
the total amount they’ll ever have to pay in one year 
(including the deductibles) before their insurance 
takes over and covers 100% of your covered services.
• In simpler terms, try to think of the deductible as the 
hurdle they need to jump over first and the out-of-
pocket maximum as a sort of safety net so they’re 
not going into total financial ruin with the amount of 
deductibles they might need to pay that year.
Why Partner with PMN?
• Both deductibles and out-of-pocket maximums are just 
another nuance on the medical billing side of things 
that are taking your staff away from their core 
responsibilities – looking after the patients that come 
into your practice.
• While it certainly helps to have an understanding of 
these sorts of things, handling claim submissions and 
communicating with insurance providers is ultimately a 
job that’s best left to people with professional 
expertise, which is exactly why large medical practices 
hire a fleet of in-house staff to do it for them rather 
than delegating it to their existing physicians.
• Smaller practices like yourselves, on the other hand, 
often don’t have the funds to pay for this sort of 
thing, and EHR software and other medical billing and 
coding technology come with their own 
complications, too – whether it’s the upfront cost 
you’re going to have to pay or the time spent training 
your staff how they work and integrating them into 
your practice.
• As a result, you’re far better off going to a specialized 
medical billing and coding service such as PMN to 
deal with insurance providers on your behalf – not 
only so your claim denial rate is drastically reduced 
(almost eliminated, even), but because of how much 
more affordable and convenient it is.
• PMN brings upwards of 20 years of experience across a 
range of different fields – from family medicine to less 
general areas like ophthalmology – to your practice, so 
regardless of what kind of billing or coding 
responsibilities your particular practice deals with on a 
daily basis, PMN can handle it promptly so you’re getting 
reimbursed as fast as possible and can spend more direct 
time with your patients.
• If you want to know more about what PMN can do for 
your practice, don’t hesitate to get in touch over the 
phone by calling 949) 215-5055. Still, not everyone will 
feel comfortable making such a big commitment over the 
phone, so you can book an appointment at their office in 
Laguna Hills, Orange County, California, if you’d prefer an 
in-person consultation.