The most you have to pay for covered services in a plan year. After you spend this amount on costs such as deductibles, co-payments, and co-insurance, your health plan will pay 100% of the costs of covered benefits.
The out-of-pocket limit doesn't include:
- Your monthly premiums
- Anything you spend for services your plan doesn't cover
- Out-of-network care and services
- Costs above the allowed amount for a service that a provider may charge
Example of out-of-pocket maximum with high medical costs:
Let's say you need surgery with allowable costs of $20,000, and the following figures apply to your health insurance plan.
- You pay the first $1,300 of covered medical expenses (your deductible).
- Your 20% coinsurance on the rest of the costs ($18,700) comes to $3,740.
- So, your total costs would be $5,040. That's $1,300 (your deductible) plus $3,740 (coinsurance).
But your out-of-pocket maximum is $4,400. Your insurance company pays all covered costs above $4,400 - for this surgery and any covered care you get for the rest of the plan year.
Generally, plans with lower monthly premiums have higher out-of-pocket limits. Plans with higher premiums usually have lower out-of-pocket maximums.