Reaching Your Out-of-Pocket Maximum

January 25, 2018

If you have a health plan, what is your out-of-pocket maximum? That’s the highest amount you’d have to pay for covered health services in a plan year.

To reach your out-of-pocket maximum, you’d pay all the costs your health plan requires you to pay. That might include a deductible—how much you have to spend in a year before your health plan begins covering your medical costs. It might include copays, the fixed amounts you have to pay for healthcare services. And, it might include coinsurance, a percentage of the cost of healthcare services.

If you’re generally in good health, you may never reach your out-of-pocket maximum. But, if one year you have a lot of healthcare expenses, you may reach it—and will be glad it’s there. After you reach it, your plan will pay for all the other costs of your covered benefits.

But, be aware: Even after you reach your out-of-pocket maximum, you’ll still have to pay your premiums, the amount you pay every month for your healthcare coverage (in many cases, with the help of your employer). The premiums are the price of having healthcare coverage, not a covered healthcare cost.

Also, your out-of-pocket maximum may apply only to your in-network expenses. Suppose you visit a doctor who is outside the network of doctors, hospitals and other healthcare providers who’ve agreed to accept your insurer’s rates as full payment. Even if you’ve reached your out-of-pocket maximum, you may still have to pay any costs for that visit not covered by the terms of your health plan.

Finally, if a healthcare service isn’t covered by your plan—such as most cosmetic surgery—you’ll have to pay for it even after you’ve reached your out-of-pocket maximum. See Healthcare Services Not Covered by Health Insurance.