what is an out of pocket maximum 
an out of pocket maximum is the most you have to pay per year for covered healthcare services when you have spent this amount in your plan year on deductibles copayments and coinsurance for in network care and services your health insurer will pay for 100 of your healthcare services 1an out of pocket maximum helps you to control the cost of your healthcare because you know the maximum you will ever have to pay in a year the out of pocket maximum for marketplace plans can t be above a set amount each year for the 2022 plan year this amount is 8 700 for an individual and 17 400 for a family 1out of pocket maximums help individuals and families avoid major financial problems associated with high healthcare costs in years when they need a lot of treatment there are some exceptions though so make sure you understand what is and isn t covered otherwise you may end up with a nasty surprise understanding out of pocket maximumsin general an out of pocket maximum is the most you have to pay per year for covered healthcare services when you have spent up to this amount on your healthcare in a year your healthcare insurer will pay for 100 of your healthcare costs deductibles copayments and coinsurance all count toward your out of pocket maximum under the affordable care act in practice however it s a little more complicated than that for example there are some costs that aren t included in your out of pocket maximum these include these exceptions mean that even when you reach your out of pocket maximum for the year you will still have to pay your premiums to stay covered you should also be careful to use in network healthcare providers if you want to control the costs of your healthcare because out of network costs don t count toward your out of pocket maximum also costs that aren t considered covered expenses don t count toward the out of pocket maximum for example if the insured pays 2 000 for an elective surgery that isn t covered that amount will not count toward the maximum this means that you could end up paying more than the out of pocket limit in a given year the highest out of pocket maximum you will have to pay is controlled by federal law the government has set limits that control how much healthcare insurers can charge for covered services per year these are different healthcare plans have different out of pocket maximum limits so you may have a choice when it comes to your out of pocket maximum in general you should choose the plan with the lowest out of pocket maximum this will keep the maximum amount you spend per year as low as possible however insurance companies balance the out of pocket maximums they offer against the premiums they charge this means that plans with low out of pocket maximums have high premiums and vice versa for example health insurance marketplace bronze and silver health plans generally have lower monthly premiums and higher out of pocket limits the gold and platinum plans which have higher monthly premiums typically have lower out of pocket limits 3lower income individuals and families may qualify for reduced out of pocket maximums through cost sharing reduction discounts to be eligible you must meet income requirements and enroll in a health insurance marketplace plan in the silver category 4cost sharing reductions offer a range of benefits these are just examples though in order to see how cost sharing reductions can affect how much you pay for healthcare shop for silver plans in the marketplace 4there are also special cost sharing reduction rules for american indians and alaska natives out of pocket maximum vs deductiblean out of pocket maximum is different from a plan s deductible the money you pay for covered services goes toward your deductible first the deductible is the amount you must pay before your insurance kicks in then when you ve met the deductible you may be responsible for a percentage of covered costs this is called coinsurance these payments count toward your out of pocket maximum when you reach that amount the insurance plan pays 100 of covered expenses out of pocket maximum examplehere s an example of how out of pocket maximums work suppose your out of pocket maximum is 6 000 your deductible is 4 500 and your coinsurance is 40 if you have covered surgery that costs 10 000 you ll first pay your 4 500 deductible which then leaves a 5 500 bill because your coinsurance is 40 you would owe another 2 200 and the insurance company would cover the remaining 3 300 that is if you didn t have an out of pocket maximum however your annual expenses are capped at 6 000 you ve already paid 4 500 so you pay only 1 500 of the 5 500 balance the insurance company picks up the remaining 4 000 your total cost for the surgery is 6 000 and follow up visits with your in network doctor are paid by your insurance because you ve already met your out of pocket maximum for the year the bottom linean out of pocket maximum is in general the maximum you will pay for healthcare in a year however there are important exceptions so make sure you understand what is and isn t covered in your out of pocket maximum lower income individuals and families may qualify for reduced out of pocket maximums through cost sharing reduction discounts to be eligible you must meet income requirements and enroll in a health insurance marketplace plan in the silver category 