Out-of-pocket maximum

An out-of-pocket maximum is the number to look at when you want to know the most a plan could ask you to pay in a bad year. It applies to covered services, so a bill for care the plan excludes, a monthly premium or a balance bill from an out-of-network provider can still be yours to pay after you reach it. The exact dollar amount, and whether it applies to one person, a family, drugs or out-of-network care, is in the plan's Summary of Benefits and Coverage or policy.

How the maximum works in a real year

HealthCare.gov (opens in a new tab) gives a Marketplace example with a $1,500 deductible, 20% coinsurance, a $5,000 out-of-pocket maximum and an office visit with a $125 allowed cost. Before the deductible is met, you pay the full $125. After it is met, coinsurance (opens in a new tab) splits the bill, and once you reach $5,000 in deductible, copayments and coinsurance for covered, in-network services, the plan pays the full amount for the rest of the plan year.

These figures leave out premiums, noncovered services, balance bills and costs the plan excludes.

What counts and what changes the number

A deductible is what you pay before the plan starts paying, coinsurance is your percentage of an allowed charge, and a copayment is a fixed amount such as $30 for a visit. They commonly count toward the maximum, but the plan document controls which costs count and some plans exclude particular copayments. Premiums (opens in a new tab) do not count, and an out-of-network provider may balance bill above the allowed amount (opens in a new tab), which generally does not count either.

• Individual and family limits. A plan can have both. The family limit applies to the combined eligible spending of covered family members.
• In-network and out-of-network. A plan may have separate limits, a combined limit or none for out-of-network care, and federal rules let network plans leave out-of-network cost sharing out of the annual limit.
• Medical and drug limits. A plan can use separate medical and prescription-drug structures.
• Marketplace federal ceiling. Under 45 CFR § 156.130 (opens in a new tab), a 2026 Marketplace plan cannot set the limit above $10,600 for self-only coverage or $21,200 for other coverage. CMS (opens in a new tab) announced $12,000 and $24,000 for 2027.
• Medicare. Covered Part D prescription-drug costs are limited to $2,100 in 2026, according to Medicare.gov (opens in a new tab). A Medicare Advantage plan sets its own limit.
• Price tradeoff. Marketplace Bronze plans usually have lower premiums and higher out-of-pocket costs when you use care, while Platinum plans usually have higher premiums and lower out-of-pocket costs, according to HealthCare.gov (opens in a new tab).

Where you will see an out-of-pocket maximum

The term belongs mainly to health coverage: individual and employer plans, Marketplace plans, Medicare Advantage, Part D and some stand-alone dental plans. You will find it on a quote or plan comparison, the Summary of Benefits and Coverage, the policy or evidence of coverage, a renewal notice and an explanation of benefits. Life, homeowners, renters, business and ordinary auto policies use deductibles and policy limits instead. An auto medical-payments limit, for example, is the most the insurer pays, not a health-style out-of-pocket maximum, according to the NAIC (opens in a new tab).

What Connecticut and New York change

Connecticut law shapes how cost sharing is counted. Under Conn. Gen. Stat. § 38a-477ff (opens in a new tab), for individual and group health policies issued, renewed, amended or continued on or after January 1, 2022, insurers must credit a discount or third-party payment toward an insured's coinsurance, copayment, deductible or other out-of-pocket expense for a covered benefit. Under § 38a-477aa (opens in a new tab), cost sharing for certain out-of-network emergency services counts toward the applicable maximum out-of-pocket limit. Section 38a-477e (opens in a new tab) requires qualifying carriers to provide estimated in-network and out-of-network cost information online and by phone.

In New York, Insurance Law § 3217-i (opens in a new tab) limits in-network cost sharing for covered non-grandfathered individual and small-group contracts to the maximum set by the superintendent, which cannot exceed the federal annual limit. Insurance Law § 4306-h (opens in a new tab) is the parallel rule for nonprofit medical and dental indemnity insurers and health and hospital service corporations. The federal individual maximum applies to each person even when that person has family coverage, according to the New York Department of Financial Services (opens in a new tab). Its Healthy NY (opens in a new tab) program lists a 2026 maximum of $10,150 for an individual and $20,300 for a family.

Questions to ask your agent or insurer

1. What are the individual and family maximums, and does the limit reset by calendar year or plan year? The answer sets your dollar exposure and the period in which payments add up.
2. Which deductibles, copayments, coinsurance and prescription-drug payments count? Plans can use separate medical and drug structures.
3. Are there separate in-network and out-of-network maximums, and do out-of-network payments count? Federal rules let network plans exclude out-of-network cost sharing.
4. Which amounts do not count, such as premiums, balance bills, noncovered care, penalties or services needing authorization? These can leave you owing money after you reach the maximum.
5. After I reach the maximum, which covered services does the plan pay at 100%, and until what date? The maximum applies only to covered services and normally resets with the plan year.

Frequently asked questions

These answers cover common follow-up questions.

Does the deductible count toward the out-of-pocket maximum?

Usually, when the deductible applies to covered services in the plan's cost-sharing calculation. The plan document lists exactly which payments count.

What happens after I reach the maximum?

The plan pays 100% of covered services for the rest of the plan or calendar year, subject to network, authorization and other plan rules. A service can still be excluded or need prior authorization.

Does out-of-network care count?

Not necessarily. A network plan may leave out-of-network cost sharing out of the annual limit, and charges above the allowed amount generally do not count.

Does Original Medicare have an out-of-pocket maximum?

Each Medicare Advantage plan sets its own out-of-pocket limit, after which the plan pays 100% of covered health services for the rest of the calendar year. Original Medicare has no general yearly out-of-pocket limit, according to Medicare.gov (opens in a new tab).