Out-of-Pocket Maximum

The out-of-pocket maximum is a feature of health insurance plans, particularly in the United States, where it protects people from unlimited medical costs.

Costs that count towards the maximum usually include the deductible, copayments and coinsurance for covered services. Premiums do not count, and neither do costs for services the plan does not cover or care from providers outside the plan's network in many cases.

For example, a plan has a deductible of 2,000, coinsurance of 20% and an out-of-pocket maximum of 6,000. A patient with a serious illness pays the first 2,000 of costs, then 20% of further costs until their total payments reach 6,000. After that, the insurer pays all covered costs for the rest of the plan year, no matter how high they go.

Under US law, most health plans must include an out-of-pocket maximum, which is capped at a level set each year by the government. When comparing health plans, the out-of-pocket maximum is an important figure, as it shows the worst-case cost a person could face in a year, apart from premiums.