A health insurance "out-of-pocket maximum" (or "OOP max") is the most you will pay in a plan year for covered health care services. Once you hit your plan's out-of-pocket maximum, your health insurance plan generally pays 100 percent of covered, in-network services for the rest of the year.
Why Out-of-Pocket Maximums Matter
Out-of-pocket maximums are one of the most important numbers on a health insurance plan because they set the ceiling on your financial risk for covered care. They can help you answer questions like:
- If something expensive happens this year, what is the worst-case amount I might have to pay?
- If I am deciding between two plans, how much risk am I taking on in exchange for a lower premium?
Your out-of-pocket maximum is your plan's built-in limit on what you can pay for covered services in a year. It is one of the best numbers to look at when you want to understand your downside risk.
What Counts Toward the Out-of-Pocket Maximum?
Most plans count certain types of health insurance cost-sharing toward the out-of-pocket maximum, such as:
- Deductibles
- Copayments
- Coinsurance
Some plans have the same deductible and out-of-pocket maximum. When that happens, it usually means there is effectively no coinsurance after the deductible. In other words, once the deductible is met, you have reached the out-of-pocket maximum at the same time.
If you want a deeper explanation of how these pieces fit together, see what is health insurance cost-sharing?
What Typically Does Not Count Toward the Out-of-Pocket Maximum?
This is where people get surprised. Depending on the plan, these items often do not count toward the out-of-pocket maximum:
- Monthly premiums
- Out-of-network charges
- Services that are not covered by your plan
- Amounts above a plan's "allowed amount" for a service
Because rules vary by plan, always confirm in your Summary of Benefits and Coverage (SBC) and your insurer's member portal.
In-Network vs Out-of-Network Out-of-Pocket Maximums
Some plans have an out-of-pocket maximum for in-network care and a separate (often higher) out-of-pocket maximum for out-of-network care. Some plans do not cover out-of-network care at all (other than emergencies), which means there may be no meaningful out-of-pocket cap for out-of-network services.
Individual vs Family Out-of-Pocket Maximums
Many plans have both an individual out-of-pocket maximum and a family out-of-pocket maximum. In general, this means:
- If only one person in a family uses care, the individual's maximum may be the relevant ceiling.
- If multiple people use care, the family's maximum serves as the combined cap for the whole family.
The exact details vary by plan design, so it is worth double-checking how your plan applies cost-sharing across family members.
How to Use the Out-of-Pocket Maximum When Choosing a Plan
When you compare plans, consider these together:
- Premium (what you pay every month)
- Deductible (what you pay before the plan shares costs in many designs)
- Out-of-pocket maximum (your cap on covered cost-sharing)
In general:
- Higher premiums often come with lower cost-sharing and a lower out-of-pocket maximum.
- Lower premiums often come with higher cost-sharing and a higher out-of-pocket maximum.
Quick Checklist: Questions to Ask Before Enrolling
- Is the out-of-pocket maximum in-network only, or does it include out-of-network spending?
- Do prescription drugs have a separate deductible or separate out-of-pocket rules?
- What exactly counts toward the out-of-pocket maximum on this plan?
- Are there services covered pre-deductible (for example, certain preventive care)?
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