The most you have to pay for covered health care services in a plan year. After you reach this amount through deductibles, copays, and coinsurance, your plan pays 100% of covered services for the rest of the year. This cap protects you from catastrophic medical bills.
Related Terms
Coinsurance
The percentage of costs you share with your insurer after meeting your deductible. For example, with 80/20 coinsurance, the insurer pays 80% of covered expenses and you pay 20% until you reach your out-of-pocket maximum.
Copay
A fixed dollar amount you pay for a covered health care service at the time you receive it. For example, you might pay a $30 copay for a doctor visit regardless of the total bill. Copays do not usually count toward your deductible but often count toward your out-of-pocket maximum.
Deductible
The amount you must pay out of pocket before your insurance coverage kicks in. A higher deductible generally means a lower premium. For example, if you have a $1,000 deductible and file a $5,000 claim, you pay $1,000 and your insurer pays $4,000.