Define: "Out-of-Pocket Maximum"
The amount which a covered person must pay for deductibles, coinsurance and co pays in a defined time period (generally calendar year) before the health plan covers all remaining medical services at 100%.
More Examples of Out-of-Pocket Maximum:
"Out-of-Pocket Costs" are costs that you pay out of your own pocket when you get health care even though you are insured and have already paid a premium. When out-of-pocket costs are very low and there are no constraints on care provided, then insurance can be very expensive and inefficient. When out-of-pocket costs are very high and there are no limits on how much you might pay, then insurance can be almost worthless for reducing your financial risk. Intermediate levels of out-of-pocket costs are generally the best deals. For these reasons, you need to know what out-of-pocket costs a health insurance policy has.
There are different types of out-of-pocket costs. When you pay up to a certain dollar amount before insurance pays anything, this is called a "Deductible." Only covered health expenses count toward your deductible. There may be a deductible for each service you get (such as paying $5 for each prescription) or there may be one deductible for whatever services you get for a whole year (such as paying up to $500 for all services during a year). A deductible for each service is often called a "Copay." Generally, insurance with higher deductibles has much lower premiums. Insurance with a very high deductible is sometimes called "Catastrophic Insurance."
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