In
insurance, the out-of-pocket maximum is maximum amount that a
policy holder will have to pay before the
insurance company covers 100% of the
remaining costs (usually for the rest of the
calendar year).
For a typical policy, the out-of-pocket maximum is the
deductible + the
coinsurance limit.
For example, a policy with a
deductible of $500 and
coinsurance of 80%/20%/$5000 would have an out-of-pocket maximum of $5500 (again, per calendar year).
Policies may have a list of certain services such as doctors visits, routine physicals, prescription drugs, etc. that require
co-payments even after the out-of-pocket maximum has been reached.
Most policies also have maximum amounts that they will
cover per calendar year or per
life of the policy. These can be in the million dollar range, for example $1 million maximum per calendar year/$6 million maximum per life of the policy. After these maximums are
reached, the policy holder is
liable for the remaining costs.