Your out-of-pocket maximum is your financial safety net. No matter how much medical care you need, once you hit this limit, your insurance company pays for everything else. It's protection against catastrophic medical bills.
How the Out-of-Pocket Maximum Works
Throughout the year, your medical expenses add up toward your out-of-pocket maximum:
- You pay your deductible for covered services
- After meeting your deductible, you pay copays and coinsurance
- All these payments count toward your out-of-pocket maximum
- Once you hit the max, insurance covers 100% of covered care
- The limit resets at the start of the new plan year
Jennifer has a plan with a $2,000 deductible, 20% coinsurance, and $7,000 out-of-pocket maximum. In April, she's diagnosed with a condition requiring $50,000 in treatment.
She pays: $2,000 (deductible) + $1,000 (20% of next $5,000) + $4,000 (to reach her max) = $7,000 total.
The remaining $43,000? Insurance pays 100%. For the rest of the year, any covered care is fully paid by insurance.
What Counts Toward Your Out-of-Pocket Maximum
These DO Count:
- Your annual deductible
- Copays for doctor visits, specialists, and prescriptions
- Coinsurance payments (your percentage of costs after deductible)
- Costs for covered in-network services
These DO NOT Count:
- Monthly premiums
- Out-of-network costs (usually tracked separately)
- Services your plan doesn't cover
- Costs above "allowed amounts" for services
- Balance billing from out-of-network providers
- Deductible paid$2,000
- Copays (12 visits)$420
- Coinsurance (surgery)$3,200
- Coinsurance (PT visits)$1,380
- Total toward OOP Max$7,000
If you know you'll have high medical costs this year (planned surgery, ongoing treatment, pregnancy), a plan with a lower out-of-pocket maximum may save you thousands, even if the monthly premium is higher. Do the math before choosing.
Individual vs. Family Out-of-Pocket Maximum
Family plans have two separate limits:
- Individual limit: The most any single person pays before their care is 100% covered
- Family limit: The total the family pays together; once reached, everyone's care is fully covered
Under ACA rules, each family member's individual out-of-pocket maximum cannot exceed the individual limit, even if the family hasn't reached the family maximum yet.
2024 Out-of-Pocket Maximum Limits
The federal government sets maximum limits for ACA-compliant plans:
- Individual coverage: $9,450 maximum
- Family coverage: $18,900 maximum
Many plans have lower out-of-pocket maximums than these federal limits. Silver plans with cost-sharing reductions can have maximums as low as $3,050 for eligible individuals.
Need Help Understanding Your Out-of-Pocket Costs?
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Get Free GuidanceFrequently Asked Questions
Is the out-of-pocket maximum the same as the deductible?
No. Your deductible is what you pay before insurance starts helping. Your out-of-pocket maximum is the total of everything you pay (deductible + copays + coinsurance) before insurance pays 100%. The deductible is part of your out-of-pocket maximum, not separate from it.
Do premiums count toward my out-of-pocket maximum?
No. Monthly premiums are separate from your out-of-pocket maximum. Premiums are the cost of having insurance; the out-of-pocket max only includes costs when you actually use healthcare services.
What if I have out-of-network care?
Most plans have a separate, higher out-of-pocket maximum for out-of-network care. Money spent on out-of-network services usually doesn't count toward your in-network maximum. Always check your plan details.
What happens after I reach my out-of-pocket maximum?
Once you reach your out-of-pocket maximum, your insurance pays 100% of covered, in-network services for the rest of the plan year. You won't owe copays or coinsurance until your limit resets (usually January 1st).