Out-of-pocket maximum

The out-of-pocket maximum is the most you can pay in a plan year for covered care from providers in your plan’s network. Once your deductible, copays and coinsurance add up to it, the plan pays 100% of covered in-network services for the rest of that plan year. It is the ceiling on your cost sharing, which is why it belongs next to the premium whenever you compare plans.

The word maximum promises more than the rule delivers. Only cost sharing on covered, in-network care fills it:

Two mistakes follow from that table. The first is reading the maximum as a cap on everything you spend on health care, which is how people pass their maximum and keep paying: the extra is premiums, excluded services or out-of-network bills. Emergencies and surprise bills follow their own rule: there you owe only in-network cost sharing, even when the provider was out of network. The second mistake is forgetting the calendar. The count starts over with each plan year, so once you reach the ceiling, further covered in-network care costs nothing until the plan year ends, and the same care early in the next plan year starts again from the deductible.

The number first appears on the plan comparison screen at NY State of Health and in a plan’s summary of benefits, where it sits beside the deductible and is easy to read past. It shows up again on each explanation of benefits, because the patient responsibility lines are what add up toward it; ask the plan for your running total. On Medicare Advantage, it arrives in the notice of changes the plan sends every fall with next year’s premium, cost sharing, network and drug list. Check whether the cap moved.

In New York: how much the maximum matters depends on which program you are in. On Medicaid and the Essential Plan the question mostly falls away: both have a $0 premium and no deductible, and the Essential Plan charges small copays for some services or none at all, depending on the income band the application places you in, with preventive care free of cost sharing. On marketplace plans, metal levels are a cost split. A cheaper premium moves cost to the day you use care, and extra cost-sharing help attaches only to certain plans, so the cheapest premium on the screen is not automatically the cheapest year. Medicare divides sharply. A Medicare Advantage plan has a yearly out-of-pocket maximum set by the plan. Original Medicare has no cap of its own: a supplement fills most of the gap, and a separate Part D plan carries its own yearly cap for covered drugs. New York keeps the supplement route open, because insurers here must accept a Medigap application at any time of year and may not deny it or vary the premium because of health status, claims experience or medical condition. State law also sets a ceiling outside any plan. Under the hospital financial assistance law, an insured patient whose out-of-pocket medical costs over 12 months exceed 10% of gross income counts as underinsured, and the income-based caps that protect uninsured patients up to 400% of the poverty level then apply to the hospital’s charges.

• Compare plans on the maximum and the premium together during open enrollment, November 1 to January 31, with December 15 as the cutoff for a January 1 start.
• On Medicare Advantage, check next year’s cap in the fall notice; the window to switch runs October 15 to December 7. Advantage or Original Medicare.
• Keep explanations of benefits and receipts for 12 months. If your out-of-pocket costs pass 10% of gross income, apply for financial assistance at the hospital as an underinsured patient.
• If a bill for emergency care, or from an out-of-network clinician at an in-network hospital, asks for more than in-network cost sharing, handle it as a surprise bill before you pay anything.

Also called: out-of-pocket limit, OOP max. Full guide: Hospital financial assistance in New York. Reference: Out-of-pocket maximum on Wikipedia — general definition, not New York specifics.