Out-of-Pocket Maximums: What They Are and Why They Matter
The Affordable Care Act (ACA) has reshaped the health insurance landscape in the United States, introducing a number of changes designed to make coverage more affordable and accessible. One of the most significant changes is the introduction of out-of-pocket maximums (OOPMs).
What is an Out-of-Pocket Maximum?
An OOPM is a limit on the amount of money you have to pay for covered health care services in a given year. Once you reach your OOPM, your insurance company will cover 100% of the costs of essential health benefits, such as doctor visits, hospital stays, and prescription drugs.
Why Out-of-Pocket Maximums Matter
OOPMs protect you from catastrophic medical expenses. Without an OOPM, you could be responsible for paying thousands of dollars out-of-pocket for medical care. This could put a significant financial burden on you and your family.
OOPMs also help to keep health insurance premiums affordable. By limiting the amount of money you have to pay out-of-pocket, insurance companies can offer lower premiums.
How Out-of-Pocket Maximums Work
OOPMs are typically calculated on a per-person basis, although some plans may have a family OOPM. The amount of your OOPM will vary depending on your plan and your insurance company.
You can reach your OOPM through a variety of expenses, including:
Deductibles
Copayments
Coinsurance
Other out-of-pocket costs
Once you reach your OOPM, your insurance company will cover 100% of the costs of essential health benefits for the rest of the year.
Out-of-Pocket Maximums and the ACA
The ACA sets limits on the amount of OOPMs that health insurance plans can charge. For 2023, the OOPM for individual plans is $9,100. The OOPM for family plans is $18,200.
These limits help to ensure that health insurance is affordable for everyone.
The Bottom Line
OOPMs are an important part of health insurance. They protect you from catastrophic medical expenses and help to keep health insurance premiums affordable. If you are shopping for health insurance, be sure to compare the OOPMs of different plans.
Question? or Need a Free Quote?
Contact Us
Reach out to us for free expert insurance advice and solutions. We will help you solve ACA (Obamacare) related questions and problems. Will contact you within 24 hours of receiving your message.