The Value of Max (aka the Scoop on MOOP)

By Marc Manor

With the cost of healthcare and healthcare related insurance getting more expensive each year, it sometimes can be hard to find the value.  Consumers are so overwhelmed with the expense, that the value of their plans is sometimes lost on them.  If a 60-year-old is paying $600 to $800 a month for a high deductible healthcare plan, who can blame them when consider opting out; especially now that the new tax law has removed the individual mandate tax penalty for not having insurance starting in 2019.  Before you go out in the world uncovered or under-covered, let me just take this opportunity to highlight what I call the “value of max” or "the scoop on MOOP".

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Almost everyone hears of the protections for pre-existing conditions that the Affordable Care Act (ACA) health insurance plans have; however, another lesser known protection is the “maximum out of pocket” feature.  Although less well known or talked about, this feature should be of great importance to those who are sitting on the fence when it comes to their 2019 healthcare coverage.

MOOP
The “Maximum out of Pocket” or “MOOP” or “Maximum OOP” or “Out of Pocket Maximum” means when your healthcare out of pocket expenses reach a certain limit, the plan will then take over and pay the remaining claims (this may or may not include the prescription drug benefit portion of the plan).  For the rest of this article I will use the term MOOP.  To explain why MOOP is so important, let’s talk about why someone has insurance to begin with: Risk!

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Insurance by its very definition, is when we pay a company to assume at least a portion of what is at risk.  With life insurance, we pay a company to assume the risk of losing a family member, particularly the primary income earner.  Disability and cancer insurance assume the risk of losing our income when someone who is sick or disabled loses part or all of their employment income.  Health insurance (including Medicare) protects our assets from the potential of enormous expenses related to healthcare.  And we all know how expensive healthcare can be. 

Doctors have a tremendous overhead in most cases.  Paying back their student loans, employing staff, and purchasing healthcare related equipment is extremely expensive.  Hospitals strive to have the latest in technology and new technology usually comes with not only the price of the hardware but the cost of the research and development built in.  This is the reason healthcare insurance is so expensive.  Those claims must be paid to keep the healthcare system alive.

How MOOP works
I can illustrate this in very easily by sharing a couple of personal stories.  I recently had a very minor (of course it did not seem minor to me) shoulder surgery.  That surgery was around $30,000.  That does not include the other diagnostic fees and months of physical therapy that followed.  In this case if I had selected a high deductible plan with a $6800 deductible and a $7500 MOOP, I likely would not have been too happy to shell out $7500 but would have been glad not to pay $30,000!  That would have come out of retirement savings or I would have had to take out a loan and pay some interest on top of it.  

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Years ago, my son fell while skateboarding and busted his teeth and face.  It was so bad, he had to go to the ER via ambulance.  He spent about 4-5 hours in the ER.  Because his injuries were related to his melon, he was given a CT scan.  The bill came to around $35,000.  I think you get the point. 

“I’m Healthy!”
I often hear someone say “I’m healthy” or “I don’t go to the doctor, so why do I need healthcare insurance?”  When I hear this I often wonder if what that person thinks when they see an ambulance drive by with sirens blaring or when they rubberneck if there is a bad auto accident on the side of the road.  I wonder if the person in the ambulance or a victim being removed from a car by the “jaws of life” thought their day would include a serious accident?  My guess is they probably didn’t, because they were healthy and did not see a doctor often.

Other Products
Another lure may be to purchase a short term or other non-ACA compliant health insurance plan.  If you can do so, then more power to you - I just would look at the benefits closely and make sure you are aware of the protections you would receive in the case of a hospitalization or surgery.  Some of those non-ACA compliant plans actually have a “Coverage Maximum” instead of a MOOP.  That can mean there is a set maximum for the coverage.  In that case, you could be jammed with the bill for anything over theset amount!  For example, if the maximum coverage for hospitalization is $50,000, then that could be expended very quickly leaving you holding the bag for charges in excess of that amount.

Bottom Line
It is widely known that medical bills are the number one reason people are forced into bankruptcy.  In many cases MOOP might prevent bankruptcy.  I am not saying $7500 is not a lot of money, because it is for me and I think it probably is for most folks.  But when deciding on whether there is any value in having a health insurance plan with a high deductible, I recommend thinking about the MOOP when making your decision as a means to mitigate the risk of depleting your savings or worse yet, putting you or your family in financial peril for a significant period of time.

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Marc Manor is a 30-year military veteran who is now dedicated to teaching his fellow Americans how to make the most of their Medicare and healthcare benefits.  As an independent agent, Marc has access to a wide variety of carriers with an abundance of resources to find tailored solutions.  There is no charge for a consultation so call 904-222-0698 or visit www.manormedisource.com today to stay on course with Medicare education and insurance solutions.
 

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