What defines the most you would pay in a year for your healthcare?

The out-of-pocket limit is the maximum amount you would have to pay in a given year for your healthcare expenses. Once you reach this limit, your insurance typically covers 100% of the costs for covered services for the remainder of the year. This is an important aspect of health insurance because it provides financial protection to the insured.

In contrast to the out-of-pocket limit, other terms describe different aspects of healthcare costs. The deductible is the amount you must pay out-of-pocket before your insurance starts to pay for covered services. A copayment is a fixed amount you pay for a specific service, such as a doctor’s visit or prescription, and the premium is the amount you pay regularly (usually monthly) to maintain your health insurance coverage. These costs contribute to your overall healthcare expenses, but only the out-of-pocket limit defines the cap on how much you will spend in a year, enhancing your financial security in cases of high medical expenses.