Total amount or the maximum you will pay out-of-your-own-pocket toward your medical expenses.
Once you have paid up to your maximum amount set by your insurance, your insurance will pay for any additional medical expenses 100%. This means no more co-pays or deductibles for covered healthcare expenses! I say covered, because if you have an expense that your insurance would not normally cover, you will need to pay for that.
Anything that you pay for covered healthcare expenses (deductibles, co-pays, etc.) go toward meeting your out-of-your-pocket maximum.
A Real World Example of How it Worx
My insurance requires a $3000 deductible and has a maximum out-of-pocket expense of $6000. This means that I must meet my deductible of $3000, then keep paying my 20% co-insurance amounts until I reach $6000 paid out of my pocket. If I am unlucky enough to meet my maximum out-of-pocket, my insurance will then start paying 100% of any additional medical expenses.
Reaching your Maximum-Out- Of-Pocket if HARD
Reaching your maximum out of pocket is hard unless you have some major health expenses. In order to reach my personal maximum out-of-pocket I would need to incur $18,000 in medical expenses.
Real World Diabetes Example
Maximum-Out-Of-Pocket = $6000, Deductible = $3000
Let’s say I was approved for an insulin pump and a Continuous Glucose Monitor. Assume a total cash price of $10,000 for this Durable Medical Equipment (DME).
To meet my deductible I would pay the first $3000. My insurance would then pay 80% and I will pay 20% of the remaining $7000. ($7000 x 20% = $1400)
The total amount of money out-of-my-pocket to buy a pump and sensor would be:
Deductible $3000 + co-insurance $1400 = $4400
Since my max-out-of-pocket is $6000, I would need to pay another $1800 in co-pays or co-insurance to meet my max out of pocket, or $9,000 in additional medical expenses.
$9,000 x 20% = $1800
Some insurances will have a cap on how much the insurance will pay in total…so if you needed let say 1 million dollars in medical expenses, they may stop paying at some point. Call you plan if you are unfortunate enough to worry about it.