14.3.7: Out-of-Pocket Maximum
Most plans also have an annual out-of-pocket maximum, which is the total amount the beneficiary would have to pay that year. Deductibles, copays, and coinsurance all count toward this maximum. So let’s add to our previous example that the person who broke their arm had a $7000 out of pocket maximum. They had already paid their $3500 deductible, then would be responsible for 20% of the remaining costs (coinsurance), up until that $7000 out-of-pocket maximum is met - then the insurance company is responsible for 100% of the remainder of the bill. So let’s say that after this broken arm/hand surgery scenario, they required physical therapy visits. Normally they would have to pay a $50 copayment for each visit, but since their out-of-pocket maximum had been met the insurance company covers the copayment for the rest of the year. Now, if the broken arm had only required the ER visit and an X-ray, and the total bill was $5000, the insured would have to pay the $3500 deductible, then 20% of the remaining $1500 ($300), and would have to pay those $50 copays for physical therapy until the out-of-pocket maximum had been met for the year (Cigna Healthcare, 2023).