Out-of-pocket maximum
Also called out-of-pocket limit, OOP max
The most a person pays for covered in-network health care in a plan year, after which the plan pays 100% of covered costs.
What it means
The out-of-pocket maximum caps a person’s cost sharing, including the deductible, coinsurance and, on most plans, copays, for covered in-network services. Once reached, the plan pays the full allowed amount for covered care for the rest of the plan year. Federal rules set an upper limit on this cap for most plans, adjusted each year.
Premiums, out-of-network charges and services the plan does not cover do not count toward it. Family plans usually have both an individual and a family maximum.
Example
Suppose a health plan has a $400 monthly premium, a $1,000 deductible, 20% coinsurance, a $30 primary care copay and a $4,000 out-of-pocket maximum. A $21,000 covered surgery would cost $1,000 deductible plus 20% of $20,000 ($4,000), or $5,000, but the cap limits the person’s share to $4,000. Including premiums, the most they would pay that year is $8,800.
How it’s used
- Planning for a worst-case medical year
- Comparing health plans
- Budgeting for a known surgery or pregnancy
Good to know
- Scheduling planned procedures in a year when the maximum has already been reached can reduce costs, since the plan then pays in full.
See it in the data: Medical care prices relative to inflation →
Related terms
Educational information only, not financial, tax or legal advice. Rules, limits and rates change; check the IRS, your lender or plan, or a qualified professional before acting.