New York Child Abuse Identification and Reporting Practice Exam

Which of the following is defined as the dollar amount beyond which the insured no longer participates in payment of medical expenses?

1. Deductible

2. Co-pay

3. Stop Loss Limit

4. Out-of-pocket maximum

The correct answer is: Stop Loss Limit

The stop loss limit is a crucial concept in health insurance, representing the threshold at which the insured no longer has to pay for their medical expenses. Once this limit is reached, the insurance company covers 100% of additional costs. This arrangement is designed to protect individuals from excessive financial burdens due to overwhelming medical expenses, ensuring that after a certain point, they are not financially responsible for further payments. The other options do not accurately define this concept. The deductible refers to the amount an insured must pay out-of-pocket before the insurance begins to cover expenses. Co-pay entails a fixed amount paid by the insured for specific services, and the out-of-pocket maximum indicates the total amount the insured is expected to pay in a plan year, including deductibles, co-pays, and coinsurance. Understanding these distinctions is essential for navigating health insurance policies effectively.