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Insurance

What is Out-of-Pocket Maximum?

The out-of-pocket maximum is the most you’ll pay for covered medical care in a year. Once you hit it, insurance covers 100% of remaining costs. Once this limit is reached through payments for deductibles, copays, and coinsurance, the health insurance plan pays 100% of all covered benefits. Under IRS guidelines, the 2026 out-of-pocket maximum for HSA-qualified HDHPs is capped at $8,500 for individuals and $17,000 for families, while ACA Marketplace plans have higher limits of $10,600 and $21,200, respectively.

Out-of-pocket maximums do not include monthly premiums, out-of-network care charges, or elective treatments not covered by the policy. It acts as a critical safety net against catastrophic medical debt.

Quick Facts

Catastrophic CapAbsolute limit on annual cost-sharing for covered care
2026 HDHP Limit$8,500 individual / $17,000 family coverage maximum
2026 ACA Marketplace Limit$10,600 individual / $21,200 family coverage maximum
Cost ExclusionsPremiums and non-covered services do not count toward cap

PRACTICAL EXAMPLE

An individual with an ACA Marketplace plan out-of-pocket maximum of $10,000 undergoes surgery costing $50,000. Through deductibles and coinsurance, they pay $10,000. The insurance company pays the remaining $40,000, and pays 100% of any subsequent covered medical claims for the rest of that plan year.

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Learn More Key Concepts

DeductibleThe amount a policyholder must pay out of pocket for covered claims before their insurance coverage begins to pay.
CopayA fixed dollar amount paid by an insured individual for a specific medical service, visit, or prescription drug.
CoinsuranceThe percentage-based sharing of covered medical costs between the policyholder and the insurer, after the deductible is met.
Health Insurance MarketplaceThe federal or state platform where individuals shop for health insurance and apply for premium tax credits.
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