What is a stop-loss provision in a medical expense policy?

• A. The point at which the insurer covers 100% after the insured's deductible and coinsurance contributions accumulate to a specified amount.
• B. A limit on monthly premium.
• C. A clause that cancels coverage after time.
• D. An extra coverage for dental.

Answer: (A)

The stop-loss provision sets a cap on what you pay out of pocket for covered medical expenses. Once your deductible and any coinsurance payments reach a specified threshold, the insurer then pays 100% of eligible expenses for the rest of the policy period. This protects you from very high medical costs.

For example, if you have a deductible of $1,000 and coinsurance of 20%, with an out-of-pocket maximum of $5,000, once your total personal payments reach $5,000, the plan covers all additional covered costs for the year.

This isn’t about limiting your monthly premium, canceling coverage, or adding dental coverage.