In insurance, the out-of-pocket maximum is maximum amount that a policy holder will have to pay before the insurance company covers 100% of the remaining costs (usually for the rest of the calendar year).

For a typical policy, the out-of-pocket maximum is the deductible + the coinsurance limit.

For example, a policy with a deductible of $500 and coinsurance of 80%/20%/$5000 would have an out-of-pocket maximum of $5500 (again, per calendar year).

Policies may have a list of certain services such as doctors visits, routine physicals, prescription drugs, etc. that require co-payments even after the out-of-pocket maximum has been reached.

Most policies also have maximum amounts that they will cover per calendar year or per life of the policy. These can be in the million dollar range, for example $1 million maximum per calendar year/$6 million maximum per life of the policy. After these maximums are reached, the policy holder is liable for the remaining costs.

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