What is an Out-of-Pocket Maximum (OOP)?
Key Takeaways
An Out-of-Pocket Maximum, or OOP, is the most required to pay for covered medical services within 12 months of your plan’s annual start date.
During a benefit year, insurance typically pays 100% of your covered benefits after you reach OOP.
Most plans count the deductible , coinsurance and copayments toward the OOP.
Uncovered medical procedures and your monthly premium payments do not count toward your OOP.
What Is It?
An out-of-pocket maximum (OOP) is the most you’ll pay for medical services within your policy’s calendar year. Almost all insurance carriers require services to be in-network and covered by your plan to count toward your OOP.
The goal of an OOP is to protect patients from high healthcare costs. For example, an 80/20 policy requires insurance to cover 80% of costs, leaving you with 20% of costs. But if you need a major procedure that costs $100,000–and insurance pays 80% (or $80,000)–you would be responsible for the remaining $20,000, which is still too expensive for most customers. Instead, your plan’s OOP will prevent your liability from exceeding a predetermined amount.
How Much Is My Out-Of-Pocket Maximum?
Each plan is different, but your OOP can’t exceed the United States Department of Health and Human Services’ maximum limit. The limits are:
U.S. Department of Health and Human Services maximum limits
Individual OOP
- $8,550 (2021)
- $ 8,700 (2022)
Family OOP
- $ 17,100 (2021)
- $ 17,400 (2022)
What Counts Toward Your OOP?
The following medical-related charges count toward your OOP:
- Deductible: is the max you’re required to pay out of pocket before your health insurance provider starts paying for covered services.
- Coinsurance: is the amount you are responsible for after you meet your deductible. Many plans require customers to pay 20% of covered services at this point.
- Copayments: is the fixed amount you pay to the doctor for covered services.
Examples of medical costs that are not subject to OOP:
- Monthly premium: is the monthly cost of your insurance plan. You will likely continue to pay this, even after your OOP has been met.
- Out-of-network visits: include visits to a doctor or specialist that is not covered by your policy.
- Procedures not covered by your policy: includes any work that falls outside of your insurance policy.
- Overpriced service: All services have a suggested cost. Procedures that exceed that amount will not count toward your OOP.
Who's Eligible?
Out-of-pocket maximums apply to policies that meet the Affordable Care Act’s requirements. Private PPO and HMO plans and Medicare Advantage policies often include an OOP.
Original Medicare (Parts A and B) does not include OOP; Medicare Supplement Insurance (Medigap) is often used to help limit patient costs.
