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If you have health insurance, the most that you will have to pay for covered health services in a year is your out-of-pocket maximum. Depending on the plan you have, “covered services” may be different, and your out of pocket maximum will vary from that of other coverages.

Costs that Go Towards Meeting the Out of Pocket Maximum

You should understand the costs you pay out of pocket.

It is significant to know what costs you pay out of pocket. Below are some costs that are comprised in most health insurance plans:

• Deductible. Your deductible is the predetermined amount of money you have to spend on qualified medical expenses before your insurance carrier kicks in and starts contributing to your medical costs. Usually, any costs that go towards meeting your deductible also go towards your out of pocket maximum.
• Coinsurance. The coinsurance amount comes as a percentage. With most plans, after you have met your deductible, you and your insurance split the cost of your qualified medical costs. If your coinsurance is 20%, that means after your deductible is met, you will pay 20% of medical expenses, and your insurance carrier will pay 80%.
• Copayment. Unlike coinsurance, this is a predetermined rate you pay for medical care at the time that you want it. When you visit the doctor or health facility, your coverage may have an outlined amount like $40 for office visits and $250 for a hospital visit that you will have to pay.

The predetermined monthly premium that you pay to be covered by your plan doesn’t go to your maximum out of pocket costs. Even after you have met your out of pocket maximum, you will continue paying your monthly premium until you cancel the coverage or change to a new plan during the open enrollment period.

 Medical services that you pay for, and which are not covered by your insurance, will not count towards your out of pocket maximum.

Copayment After Out of Pocket Maximum?

In most cases, there is no copayment for covered medical services after you have met your out of pocket maximum.

This is a popular question that comes up, but it is easy to answer if you know the practical definitions for both of these health insurance terms. A copayment is an out of the pocket payment that you make towards typical medical expenses such as doctor’s office visits or an emergency room visit. An out of pocket maximum is the set amount of money you will have to pay in a year on covered medical expenses. In most health insurance coverage, there is no copayment for covered medical services after you have met your out of pocket maximum. All plans are different, though, so ensure you pay attention to plan details when buying a plan. If you have already purchased a plan, you can look at your copayment details and ensure that you will have no copayment to pay after you’ve met your out of pocket maximum.

 In most cases, though, after you have attained the set limit for out of pocket costs, insurance will be paying for 100% of covered medical bills.

Does my Out of Pocket Maximum Include my Deductible?

The short answer is yes. Again, understanding the definitions for both these terms will aid answer questions you have about what is included in your out of pocket maximum. Your deductible is a dollar amount you pay out of pocket, after which your insurance company will contribute to medical expenses. Your out of pocket maximum is a total of everything you have paid out of pocket for medical services. Thus, if you had a $400 emergency room visit prior to meeting your deductible, it will assist you get close to meeting both that and the out of pocket maximum.

References and Resources

• Copayment Definition
• Emergency Room Visits