An out-of-pocket maximum is a predetermined, limited amount of money that an individual must pay before an insurance company or self-insured health plan will pay 100% of an individual’s covered, in-network health care expenses for the remainder of the year. It is a cap or limit on the amount of money you have to pay for covered health care services in a plan year. Once you meet that limit, your health plan will pay 100% of all covered health care costs for the rest of the plan year. The out-of-pocket maximum typically includes your deductible, coinsurance, and copays, but this can vary by plan.
Here are some key points to keep in mind about out-of-pocket maximums:
- The out-of-pocket maximum is the most you have to pay for covered services in a plan year.
- After you spend this amount on deductibles, copayments, and coinsurance for in-network care and services, your health plan pays 100% of the costs of covered benefits.
- The out-of-pocket limit doesnt include your monthly premiums, anything you spend for services your plan doesnt cover, out-of-network care and services, or costs above the allowed amount for a service that a provider may charge.
- If you have dependents on your plan, you could have individual out-of-pocket maximums and a family out-of-pocket maximum.
- The out-of-pocket maximum varies by plan and cant go over a set amount each year.
- If you buy a plan on your own and not through an employer, there are set limits for these out-of-pocket maximums.
- The federal government publishes new guidelines each year that include the highest out-of-pocket maximum that health plans can impose.
- The out-of-pocket maximum is different from the deductible, which is the amount you pay for covered services before your insurance plan starts to pay.
Its important to understand the out-of-pocket maximum of your health insurance plan so that you can plan your healthcare expenses accordingly.
