What is the annual out-of-pocket maximum?

The annual out-of-pocket maximum is the most you can pay in a given year for covered health care services before your health insurance starts covering 100% of the costs. Once you reach this maximum amount, you will not be required to pay any further costs for covered health services for the remainder of that year. This feature is designed to protect individuals from excessive medical expenses and to provide a cap on their financial liability for health care.

Understanding this financial limit is important for managing health care costs and making informed decisions about insurance coverage and medical care usage. It is distinct from other terms such as deductibles, which refer to the amount paid before insurance coverage begins, or lifetime coverage limits, which were more common in past insurance policies and refer to limits on how much can be paid out over the life of a policyholder.