Answers / Insurance
INSURANCE

What’s the difference between a deductible and an out-of-pocket maximum?

SHORT ANSWER

A deductible is what you pay before insurance starts covering costs. The out-of-pocket maximum is the most you’ll pay in a year — after that, insurance covers 100% of covered services.

These two numbers control what you actually pay. Your deductible is the amount you cover yourself before the insurer begins paying its share. After the deductible, you usually still pay copays or coinsurance — until you hit your out-of-pocket maximum, the annual ceiling on your total spending for covered care. Once you reach that maximum, the insurer pays 100% of covered services for the rest of the year. Understanding both tells you your real worst-case cost.

What to do, in order

  1. Find your plan’s deductible — what you pay before coverage kicks in.
  2. Find your out-of-pocket maximum — your annual spending ceiling.
  3. Know that copays/coinsurance apply between the two.
  4. Track your spending toward both across the year.
  5. After the max, covered services should cost you nothing.

Common questions

Do copays count toward the out-of-pocket maximum?

Usually yes — copays, coinsurance, and deductibles typically count toward the out-of-pocket max, though premiums do not.

What happens after I hit my out-of-pocket maximum?

The insurer generally pays 100% of covered, in-network services for the rest of the plan year — you owe nothing more for those.

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