Ready to enroll? See how much could you save on 2022 coverage. Show What is an out-of-pocket maximum?An out-of-pocket maximum is a predetermined, limited amount of money that an individual must pay before an insurance company or (self-insured health plan) will pay 100% of an individual’s covered health care expenses for the remainder of the year. Health insurance plans can set their own out-of-pocket maximums, but they’re constrained by federal regulations that impose an upper limit on how high out-of-pocket costs can be. In 2022, the upper limits are $8,700 for an individual and $17,400 for a family. For 2023, they will increase to $9,100 and $18,200, respectively. (These caps apply to in-network care that’s considered an essential health benefit, and only to plans that are not grandfathered or grandmothered or exempt from ACA regulations, as those plans do not have restrictions on their out-of-pocket exposure.) The federal government publishes new guidelines each year that include the highest out-of-pocket maximum that health plans can impose (through 2022, this was published in the annual benefit and payment parameter notice; for 2023 and future years, it’s published in guidance that HHS issues no later than January of the prior year). So the highest allowable out-of-pocket maximum changes annually. In 2014, it was just $6,350 for an individual, but by 2023, it will have increased by more than 43%. Many health plans, however, have out-of-pocket maximums that are well below the highest allowable amounts. For perspective, here are the federally allowed maximum out-of-pocket amounts since they debuted:
If you have Medicare coverage, be aware that there is no out-of-pocket maximum for Original Medicare, which is why most enrollees have supplemental coverage (from an employer-sponsored plan, Medigap, or Medicaid). Medicare Advantage plans must cap out-of-pocket costs at no more than $7,550 (that limit became applicable as of 2021, and does not change as often as the limits that apply to non-Medicare plans), but that does not include out-of-pocket costs for prescription drugs covered by the Part D coverage that’s integrated with most Advantage plans. Part D coverage does not have a cap on out-of-pocket costs, and that’s true regardless of whether the Part D coverage is purchased as a stand-alone plan or as part of a Medicare Advantage plan. Related articlesComparing the out-of-pocket maximum vs. the deductible amount you pay for medical services in a health insurance plan is a step we should all take. This can help you see whether the plan will help you save money on your medical needs or result in paying too much for coverage you don’t need. But finding the right plan for your budget requires more than just comparing premiums. What Are Deductibles?A deductible is a specified amount of money you pay out of your own pocket before your health plan begins to make payments for claims. This is a separate out-of-pocket item not to be confused with the copayments and coinsurance costs associated with using your health insurance for coverage.1 When you meet your deductible for the year in qualifying medical services and expenses, you’ll then pay a set copay or coinsurance (a percentage of the provider’s charge for your medical needs)2 until you reach the out-of-pocket maximum.1 What Are Out-of-Pocket Maximums?Your out-of-pocket maximum or limit is the most you will ever have to pay out of your own pocket for annual health care. This limit includes the deductible, copays, and coinsurance you will continue to pay after you reach the deductible. When this maximum is met, any dollar over that amount will be 100% covered by your insurance provider. However, your monthly premium, out-of-network services, and services not covered by your plan are not included in the out-of-pocket maximum.3 The out-of-pocket maximum for Affordable Care Act plans can vary, but they are not allowed to go over a set amount each year. In 2020, that amount was $8,150 for individual plans and $16,300 for family plans. In 2021, those amounts have increased to $8,550 for individuals and $17,100 for families.3 Typically, the out-of-pocket maximum is higher than your deductible amount to account for the collective costs of all types of out-of-pocket expenses such as deductibles, coinsurance, and copayments. The type of plan you purchase can determine the amount of out-of-pocket maximum vs. deductible costs you will incur. HealthMarkets can help you find the right health plan for your budget and medical needs. Just visit us online to start comparing plans today. 46910-HM-0121 References: |
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