What is an out-of-pocket maximum and what happens when it is reached?

• A. It is the total premiums paid; when reached, coverage ends.
• B. It is the maximum limit of benefits; once reached, no further benefits.
• C. It is the maximum limit of deductible plus copays; after, only coinsurance applies.
• D. It is the maximum amount the insured pays out-of-pocket in a policy year; once reached, insurer pays 100% of eligible expenses.

Answer: (D)

An out-of-pocket maximum is the most you’ll have to pay in a policy year for covered medical services. It includes the amounts you pay as deductible, copayments, and coinsurance, but it does not include premiums. Once you reach that limit, the insurer covers 100% of eligible expenses for the rest of the year, so you no longer pay coinsurance or copays for those covered services. This protection does not end your coverage; it simply caps your additional costs throughout the year and typically resets next year. Some plans may have separate rules for in-network versus out-of-network services, and non-covered services don’t count toward the maximum.