What is an out-of-pocket limit?

An out-of-pocket limit is an insurance term that defines the maximum amount of money a person has to pay for their healthcare services before their health insurance plan will cover the remaining costs. The out-of-pocket limit consists of two parts: the deductible and coinsurance. In California, the out-of-pocket limit is determined on a yearly or calendar-year basis. The amount of the out-of-pocket limit depends on the type of plan and its specific terms. The deductible is the amount of money a person must pay each year before their health insurance plan will start to pay for their healthcare services. The coinsurance is the amount of money a person must pay each year after they have met their deductible. Coinsurance is typically a percentage, such as 20%, that a person has to pay for their healthcare services after they have met their deductible. In 2020, the out-of-pocket limit for a single person in California is $8,150. This means that a person should not have to pay more than $8,150 for their healthcare services in a year, including their deductible and coinsurance. After this limit is met, the insurance provider will cover the remainder of the cost for the covered healthcare services. It is important to keep in mind that the out-of-pocket limit is not the same as the annual premium. The annual premium is the amount of money a person or family pays each year for their health insurance plan. The out-of-pocket limit is the maximum amount of money a person has to pay for their healthcare services before their health insurance plan will cover the remaining costs.

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What is an out-of-pocket limit?

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