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Health Insurance Basics

How an Out-of-Pocket Maximum Works For You

August 10, 2017

Simply stated, an out-of-pocket maximum, or OOP max, is a cap that limits how much you might have to pay out of your own funds for health care services each year. Check out this infographic to learn more about how your OOP max benefits you.

Infographic Text

Most health care plans have an out-of-pocket maximum, or OOP max. This benefit caps how much you may have to pay for your care and helps to protect your financial security.
 
How Does an OOP Max Work?
 
Your OOP max is specified in your plan. If you have an individual plan, you’ll have an individual OOP max. If you have a family plan, you’ll have an OOP max for all of your family’s care combined.
 
Your OOP max includes your: Deductible, copays, and the portion of the cost of care you’re responsible for. Your OOP max does not include your monthly payments.
 
Over time, the amounts you pay toward your care are applied toward your OOP max. Your plan may also pay a portion of your costs during this time. Once you’ve met your OOP max, your plan will pay all of your covered costs until your OOP max resets. 
 
Your OOP max resets whenever you change or renew your plan. Most health care plans have an out-of-pocket maximum, or OOP max. This benefit caps how much you may have to pay for your care and helps to protect your financial security. That means it restarts at zero when you get a new plan or at the beginning of each renewal period for your current plan.
 
Suppose you need covered care that costs $20,000. Your plan has a$1,300 deductible. You’re responsible for 20% of the cost of your care after that. Your OOP max is $4,400.
 
How Much Would You Pay?
 
First, you’d pay your $1,300 deductible. Then, you’d pay 20% of the remaining $18,700, which would be $3,740. But since your OOP max is only $4,400, you would not have to pay the full amount of $5,040. Instead you’d pay only $4,400, including your deductible and part of your 20%, and that’s it. If you’d already met all or part of your deductible and OOP max, you’d pay even less.