Out-of-Pocket Maximum — Definition and What It Means for Your Income
The most a person will pay for covered healthcare services in a year before insurance covers 100%.
Out-of-pocket maximum is the cap on what an individual must pay for covered healthcare services in a plan year, including deductibles, copays, and coinsurance. After reaching this limit, the insurance plan pays 100% of covered services. For 2024, IRS limits are $9,100 for individuals and $18,200 for families.
Why it matters
Even with health insurance, a single serious medical event can result in thousands of dollars of unexpected expenses up to the out-of-pocket maximum — an important consideration for emergency fund sizing.
Example
Someone with a high-deductible health plan might face $2,000-$8,000 in out-of-pocket costs for an ER visit and follow-up care, even with insurance, up to their plan's out-of-pocket maximum.
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Out-of-Pocket Maximum — FAQ
What is the 2024 out-of-pocket maximum?
For 2024, IRS limits for high-deductible health plans are $9,100 for individual coverage and $18,200 for family coverage.