What is an Out-of-Pocket Maximum (OOP)?
How OOPs limit your total annual healthcare costs
Written by: Andrew Hall.
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 deductibleA deductible is the amount you pay out of pocket before your insurance company covers its portion of your medical bills. For example: If your deductible is $1,000, your insurance company will not cover any costs until you pay the first $1,000 yourself., coinsuranceCoinsurance is the percentage of your medical costs that you pay after you meet your deductible. The remaining amount is paid by your insurance company. For example: If you have a $1,000 medical bill and your coinsurance is 20%, you'll pay $200. Your insurance company will cover the final $800. and copaymentsA copayment (copay) is the fixed amount you pay directly to your provider for medical services or prescription drugs covered in your plan. For example: If your plan includes a copayment of $20 for office visits, you'll pay $20 to your doctor whenever you have an appointment. toward the OOP.
Uncovered medical procedures and your monthly premium payments DO NOT count toward your OOP.
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.
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||Family OOP|
|$7,900 (2019)||$ 15,800 (2019)|
|$ 8, 150 (2020)||$ 16,300 (2020)|
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.
Do OOP maximums vary by insurance provider?
Yes. Be sure to consult with your benefits specialist or a licensed insurance agent to find a plan that best meets your needs and budget.