Out-of-Pocket Max Explained

Have you ever heard someone say that health insurance gives you peace of mind? Maybe peace of mind isn’t the first thing you think of when you’re tackling a pile of healthcare bills and health insurance paperwork. But here’s the thing: At any moment, you (or those in your household) could experience a major health issue or injury. Something that could costs tens or even hundreds of thousands of dollars.

Without health insurance, that kind of medical cost can bankrupt a family. But with health insurance, there’s a limit to how much you’ll pay for your healthcare.

Federal law sets the dollar limit. For 2015, an insured individual won’t pay more than a maximum of $6,600. And an insured family won’t pay more than $13,200. Remember, these limits are for covered care from an in-network provider.

Some health insurance plans set a lower out-of-pocket max. In other words, some plans give you even more protection than federal law requires.

As long as you have health insurance, you can rest assured that you won’t ever have to pay more than your max for covered healthcare costs.

What else you need to know

Some costs aren’t counted toward your out-of-pocket max.

1. Your premium. Every month, you’ll be paying your monthly premium to the health insurance company. That amount is not part of the tally for your out-of-pocket max.
2. Balance billing, or any other money spent on healthcare outside your network. Let’s say you decide to go to a specialist who isn’t part of your network and your insurance plan doesn’t cover the cost. Most likely, the bill for out-of-network care is higher — and the money you spend on it isn’t counted toward your out-of-pocket max.
3. Money spent on treatment that your insurance company doesn’t approve. Imagine you’ve found an experimental test that you’d really like your doctors to run. But when you call the insurance company, they tell you that it’s not standard treatment for your condition, and they won’t cover it. If you opt to get the test anyway, the money you spend on it won’t count toward your out-of-pocket max.
4. Some drug copays. Depending on how your plan is structured, the copays you spend on prescription drugs might not count toward your out-of-pocket max.

Many costs are counted toward your out-of-pocket max.

1. Most copays. If you pay a copay to see a doctor, it counts toward your out-of-pocket max. With most plans, your drug copay counts, too.
2. Your deductible. Remember, with any plan you buy, you’re paying out of your own pocket for most everything until you hit your deductible. The good news is that all those dollars you pay out of your own pocket count toward your out-of-pocket max.
3. Your coinsurance. Once you’ve met your deductible, your insurance company starts sharing the cost of your healthcare with you — that’s called coinsurance, and the dollars you spend on it also count toward your out-of-pocket max.

The out-of-pocket max can vary by plan, and it’s different for individuals and families.

The most you’ll have to pay is set by law. No matter which plan you choose, you’ll never have to pay more for covered services than that max. However, you might want to look for a plan with a lower out-of-pocket max if you’re dealing with a pre-existing medical condition, or planning a major surgery or new baby. In those cases, it might save you some money in the long run. If you’re generally healthy and don’t use a lot of healthcare, however, a lower out-of-pocket max may not be a priority.

If you’re shopping for two or more people, pay attention to the family out-of-pocket max. That’s the number that will matter for you.