Out-of-pocket maximum

Before you rely on it

What to check

Find out whether premiums, out-of-network care and non-covered services count toward it.

The common error

Where people go wrong with out-of-pocket maximum

Assuming it caps everything. Premiums usually sit outside it, out-of-network care often has its own separate and much higher limit, and real exposure is therefore above the headline figure.

Worked through

Out-of-pocket maximum in plain numbers

Suppose a plan has a $2,000 deductible, 20% coinsurance and a $6,000 out-of-pocket maximum for in-network care; a large hospital stay is billed at $100,000. You pay the $2,000 deductible, then 20% of the remaining $98,000, which would be $19,600. But your share stops at $6,000 for the year, and the plan pays everything else for covered in-network care. Once you hit the cap, you owe nothing more for covered services until the plan year resets. The numbers are examples. Premiums, out-of-network charges and services the plan does not cover usually sit outside the cap.

Easily confused

Out-of-pocket maximum and its neighbours

The out-of-pocket maximum is not the deductible. The deductible is what you pay before the plan starts sharing costs; the maximum is the ceiling on the total you pay in a year through deductibles, copays and coinsurance for covered in-network care. Premiums do not count toward it. Individual and family limits may differ. It is also not the same as an annual coverage limit, which caps what the insurer will pay. Different plans count some items, such as prescription copays, differently.

In real decisions

Where out-of-pocket maximum turns up

When choosing a plan, the maximum shows your worst case for a year of covered care. Adding the annual premiums plus the maximum gives the highest total cost; people with expected surgery or chronic conditions compare plans by likely spending, which often gets close to the cap. Healthy people may prefer low premiums with a high cap. Employers and marketplaces list it in the plan summary.

Know the edges

Where out-of-pocket maximum stops being reliable

Out-of-network care, balance billing in some cases, non-covered services and premiums are usually outside it. Family plans can have embedded and aggregate limits that work differently. Limits reset on the plan year, not the calendar year in some cases. This page is educational and not insurance advice. Read your plan documents or ask the insurer how your plan counts costs.

Quick answers

What people ask about out-of-pocket maximum

Do copays count toward the maximum? In most plans, yes, for covered in-network care. Some plans exclude certain items such as prescriptions or out-of-network charges. Check your summary of benefits.

Does the maximum reset each year? Yes, at the start of the plan year, which may not match the calendar year. Any progress you made resets to zero.

What is the difference between individual and family maximums? A family plan may have an individual limit for each member and an overall family limit. Once either is reached, the plan pays covered costs for that person or the family.

Is the maximum the same as my total health cost? No. Premiums, out-of-network charges and non-covered services generally sit outside it. Your total annual cost is premiums plus what you pay toward covered care, up to the cap, plus anything excluded.