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what happens if medical bills exceed policy limits

What Happens If Medical Bills Exceed Policy Limits?

Medical bills are a way to earn profit for healthcare facilities, but for patients, it is a headache. But when a person has an insurance plan, they are protected from expensive medical bills. Their coverage saves their day, paying for all medical expenditures. However, many unfortunate times your bill lists cost more than your insurance plan. So what happens if medical bills exceed policy limits?

Many of you know that insurance coverage pays for your medical expenses. But some of you are still unaware of what are the consequences when your bills exceed your insurance plan. Do you have to pay for that? Let’s learn about this scenario so you are prepared for what to do next.

How To Understand Insurance Policy Limits?

Before learning anything, you must know that regular monitoring of your insurance plan is essential. It helps you keep a check on how much expenses your health insurance can cover. So let us tell you some ways to learn about your policy limit.

Types Of Insurance

First of all, you must know what type of insurance plan you have. Whether it is auto insurance, homeowners insurance, or health insurance. Since each type of plan has its unique perks, you must analyze which one is yours.

Coverage Caps

Insurance policy limits identify the maximum amount your plan will cover. I.e if your plan limit is $100,000, and if you have an auto insurance plan then it will cover only $100,000 of the total medical bill. Any additional cost will be payable by you. 

Components Of Policy Limit

There are different limitations on different components of policies. For bodily injuries limitations might be different than other damage.

Supplementary Coverages

Besides basic policy coverage, some insurance plans offer other coverages as well. One example of this is umbrella policy which provides an extra layer of protection to your insurance coverage.

Review Your Policy

As we said, review your policy regularly. Read carefully the coverage limit, deductibles and other essential billing details. 

Insurance Limits And Legal Issues

Liability limits are essential in covering your medical expenses. Any cost more than that may cause financial problems for you. You may either pay the remaining cost or face legal consequences. So here it is crucial to have sufficient insurance coverage.

Consult With Insurance Professional 

Lastly, if you are new to this, have a detailed conversation with a professional who has ample knowledge about updated policy terms. Ask about the perks and limitations of different plans offered. Clear all your doubts and learn about their insurance plans.

What Happens If Medical Bills Exceed Policy Limits?

Suppose you catch yourself in an accident unexpectedly and the doctor admits you to the hospital. When you are done being treated, your medical bill is sent to the insurance company. But because you utilized your plan recently you were ill, and this time your bill mentioned expenditures a lot more than your insurance plan. So what happens if medical bills exceed policy limits? Here are some possible outcomes of this situation:

Out-Of-Pocket Cost

This is the simple solution of the scenario. If your medical bills cover more than your insurance coverage, then you are responsible for paying your bill. Since you owe it, you can’t run away from this bill and have to pay by all means.


Many times insurance companies themselves negotiate with healthcare providers and ask them to set low payments. But this process has the least guarantee of success because providers don’t agree with less than the actual bill amount.

Other Policies

Besides basic financial hardships you will face when your medical bill exceeds policy limits, you will be offered some options like bill coverage through other insurance plans. An umbrella policy is another great option you might avail of at this time.

An umbrella policy is no different than what we discussed right now. This policy involves extra coverage plans than the actual insurance plan. It helps patients use this power to get rid of expensive medical bills. When they get higher bills than insurance coverage, this umbrella policy pays on their behalf.

It also protects patients from legal consequences after this scenario, offering peace of mind.

What To Do Next?

Now, you have seen what happens if medical bills exceed policy limits, knowing what should be your next step is essential. If you are unfortunate enough to get in this situation, don’t panic. Here are some steps you can take next to minimize the impact.

Review Your Policy

Take out all your insurance policy documents and review the terms carefully. Understand the total cost associated with your coverage. Find out the specific conditions that apply to your situation.

Contact Your Provider

If you get stuck in such a situation, without wasting a second, call your insurance provider and tell them the whole scenario. Inquire about the medical bills they are yet to pay and ask about other cost-handling options beyond the insurance plan.

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    Contact immediately to your healthcare provider and explain your situation. Tell them that your bill has exceeded the amount of insurance coverage and you are unable to pay. Ensure honesty while explaining your financial condition.

    Many times healthcare providers offer help in the form of discounts or easy installment plans. So don’t hesitate to get in touch with them.

    Mediation Or Arbitration

    Lastly, when nothing works out, go towards Mediation or Arbitration since this way you will be able to handle the situation without facing court and legal issues. 

    Arbitration and mediation is a pretty similar process. Here, a neutral third party listens to your case and presents it to the healthcare providers. This is a confidential process of resolving conflict and dispute between you and your bill receiver.

    4 Rights You Have

    Besides all this information, knowing your rights is crucial when medical expenses surpass the limits of your insurance policy because this can result in complicated situations. The following are some general things to think about, but it’s important to get advice from legal and insurance experts based on your particular circumstances:

    Right To Appeal

    You usually have the right to appeal if you think the insurance company’s decision was incorrect or if you feel your claim has been unfairly denied. Most insurance policies include a procedure for contesting decisions regarding claims.

    Right To Legal Counsel

    You have the right to legal representation if the case entails complicated legal matters or if you are dealing with liability claims that might be greater than your insurance. Advice on your rights, possible legal actions, and negotiation tactics can be obtained from an attorney.

    Right To Financial Assistance Programs

    Certain healthcare providers provide financial assistance programs to people who are struggling financially. It is your right to find out more about these initiatives and see if you are eligible for support.

    Right To Coordination Of Benefits

    You have the right to divide benefits among your insurance policies if you have more than one in order to optimize coverage. If you have both primary and secondary insurance policies, this is especially important.

    Exceeding Policy Limits

    Today, many patients ask what happens if medical bills exceed policy limits, so here we have provided a detailed guide on what you will face after this mishap, what steps you should take, and the importance of having some insurance policy knowledge in advance. All this knowledge will save you from future problems. Keep reviewing your insurance and never get stuck in this situation again.

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