Online out-of-network cost calculator to estimate patient cost, insurer payment, deductible, coinsurance, out-of-pocket cap, and potential balance billing.
Out-of-Network Cost Formula
Out-of-network cost sharing is generally calculated from the plan's allowed amount rather than the provider's billed charge:
Plan Cost Share = Deductible Applied + Coinsurance * (Allowed Amount - Deductible Applied) + Copay
The modeled patient cost caps plan-counted cost sharing at the remaining out-of-pocket maximum and then adds any permitted balance bill:
Patient Cost = min(Remaining OOP Max, Plan Cost Share) + max(0, Billed Charge - Allowed Amount)
Variables:
- Billed Charge is the amount requested by the provider
- Allowed Amount is the plan's recognized amount for the service
- Deductible Applied is the smaller of the allowed amount and remaining deductible
- Coinsurance is the patient's percentage after the deductible
- Remaining OOP Max is the amount left before the applicable plan maximum
- Balance Bill is the billed amount above the allowed amount when the provider can collect it
The insurer payment is the allowed amount minus the modeled plan-counted patient share. A balance bill is outside that allowed amount.
Out-of-Network Cost Examples
The examples use a 40% patient coinsurance rate, a $1,000 remaining deductible, and a $6,000 remaining out-of-pocket maximum.
| Billed charge | Allowed amount | Balance billing | Estimated patient cost | Estimated insurer payment |
|---|---|---|---|---|
| $5,000 | $2,500 | Yes | $4,100 | $900 |
| $5,000 | $2,500 | No | $1,600 | $900 |
| $2,000 | $1,200 | Yes | $1,880 | $120 |
| $10,000 | $4,000 | Yes | $8,200 | $1,800 |
Example Problems
Example 1: Include a balance bill.
A provider bills $5,000, the plan allows $2,500, $1,000 of deductible remains, and the patient owes 40% after the deductible.
The plan-counted share is $1,600: $1,000 deductible plus $600 coinsurance. A possible $2,500 balance bill raises estimated patient cost to $4,100 before any copay.
Example 2: Apply the out-of-pocket maximum.
The calculated plan cost share is $2,000, but only $500 remains to reach the applicable out-of-network maximum.
The plan-counted share is capped at $500. Any permitted balance bill is then added separately because it may not count toward the maximum.
Frequently Asked Questions
What is an allowed amount?
It is the maximum amount the plan recognizes for a covered service. Deductible and coinsurance are generally based on that amount, not necessarily the provider's full charge.
What is balance billing?
Balance billing occurs when a provider seeks the difference between the billed charge and the plan's allowed amount. Federal or state protections can prohibit it in certain situations.
Does out-of-network spending count toward my in-network maximum?
Often it does not. Plans can have separate out-of-network deductibles and out-of-pocket limits, and balance bills may not count toward either limit.
