It is a requirement for plans that meet the standards of the Affordable Care Act (ACA) to have maximum out-of-pocket payments. As the health insurance industry changes, there may be plans outside of the ACA that do not meet these standards.
What is the difference between an individual or a family out-of-pocket maximum?
Health plans that cover more than one person in a plan often have individual out-of-pocket maximums as well as a family out-of-pocket maximum.
- Individual out-of-pocket maximum: If someone in the plan reaches their individual out-of-pocket maximum, the plan begins to pay 100% for your covered care for the remainder of the plan year. All expenses paid by individuals also count toward the family out-of-pocket maximum.
- Family Out-of-Pocket Maximum: Out-of-pocket costs for each count toward the family out-of-pocket maximum. This could include the costs of deductibles, coinsurance, and copayments. If the family out-of-pocket maximum is reached, the plan pays 100% of each member’s covered expenses for the remainder of the plan year.
If you contract a plan on your own and not through your employer, there are fixed limits for these maximum out-of-pocket costs. This is part of the Affordable Care Act (ACA). **
Do most people reach their maximum payouts?
How you use your health plan and what you need your coverage for are important issues when reaching your out-of-pocket maximum:
- If you are generally healthy and only perform an annual check-up, you may never reach your deductible. Your health plan pays for most preventive care, so your expenses will be low.
- If you need a lot of medical care other than routine care, then your medical bills could add up. In this case, you may reach your maximum out-of-pocket.
The out-of-pocket maximum is the most you will pay in a plan year before your plan begins to cover your care. You must understand how the out-of-pocket maximum works with the rest of your health plan, including deductibles, coinsurance, and copayments. When choosing a health plan, be sure to consider all of these factors, as well as your anticipated health needs.
Out-of-pocket maximum / limit
The maximum amount you have to pay for covered services in a plan year. After spending this amount on deductibles, copays, and coinsurance for in-network care and services, your health plan pays 100% of the costs for covered benefits.
The out-of-pocket limit does not include:
- Your monthly premiums
- Any expenses for services your plan doesn’t cover
- Out-of-network care and services
- Costs greater than the allowed amount for a service that a provider can charge
The out-of-pocket limit for Marketplace plans varies, but cannot exceed the amount set each year.
- For the plan year 2022: The maximum out-of-pocket limit for any Marketplace plan cannot be more than $ 8,700 for an individual and $ 17,400 for a family.
- For the plan year 2021: The maximum out-of-pocket limit for any Marketplace plan cannot be more than $ 8,550 for an individual and $ 17,100 for a family.
What is coinsurance?
There are two types of cost-sharing:
Copayment: A fixed amount – for example, $ 10 – that you pay for a doctor’s visit or prescription covered by your health plan. It is usually paid when you receive the service.
Coinsurance: A percentage of the costs – for example, 30% – that you pay for a doctor’s visit or prescription covered by your health plan. You will receive a bill for this once you have obtained the service.
When these costs apply will depend on two key details of your plan:
Deductible: The amount you must pay for covered medical services and prescriptions before your insurance company begins to pay a percentage of your bills.
Out-of-pocket maximum limit: The most you would have to pay for covered services and prescriptions in a plan year.