What is an out-of-pocket maximum?

An out-of-pocket maximum is a limit set by health insurance plans that specifies the maximum amount of money an individual must pay out of their own pocket for medical expenses each year. This is also referred to as a max out-of-pocket, max out-of-pocket expense, or max out-of-pocket expenditure. It includes any out-of-pocket costs such as deductibles, coinsurance, and copayments. In California, the out-of-pocket maximum is the most an individual can be required to spend on medical care in a given plan year and this limit is set by the insurance company. It is important for individuals to understand their out-of-pocket maximum as this is the most they would be expected to pay in one year for their medical expenses. The out-of-pocket maximum is particularly beneficial for people who have serious medical conditions as it helps protect them against potentially large medical bills. This limit can also be beneficial to those who use a lot of healthcare services as it reduces the amount of money they need to spend out of their own pocket each year.

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