Content Overview 
- Adverse Determination
- Annual Limits
- Case Manager
- Certificate of Creditable Coverage
- Coordination Of Benefits
- Co-Insurance
- Co-Pay
- Covered Charges
- Department Of Insurance
- Deductible
- Eligibility
- Experimental Treatment
- Explanation Of Benefits
- Extensions
- Fee-For-Service (Indemnity)
- Formulary
- Lifetime Limits
- HMO
- Medical Necessity (Medically Necessary)
- Out Of Network
- Out-of-Pocket Maximum (also known as "Stop Loss" or "Cap")
- Palliative Care
- POS
- PPO
- Renewability
- Pre-Existing Health Condition
- Stop Clause (also known as "Stop Loss Clause")
- Underwriting (What It Is And How It Works)
- U.S. Department Of Labor
- Usual, Customary and Reasonable "(UCR")
- Utilization Management
Glossary of Health Insurance Terms To Know
Out-of-Pocket Maximum (also known as "Stop Loss" or "Cap")
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An out-of-pocket maximum is the maximum amount of money that you have to pay out-of-pocket for your medical expenses under a policy each calendar year. After you meet your out-of-pocket maximum, then the insurance company will pay 100% of your medical expenses for the rest of the calendar year.
The amounts you pay for each of the following count towards meeting your out-of-pocket maximum:
- Annual deductible
- Co-payments
- Co-insurance amounts
Your monthly premiums do not count towards meeting your out-of-pocket maximum.
After you meet your out-of-pocket maximum, then the insurance company will pay 100% of your medical expenses for the rest of the calendar year.
For example:
- You have a plan with a $500 deductible, a 80% co-insurance, and an out of-pocket maximum of $4,000.
- Then you incur a medical bill of $10,500.
- First, you would pay your $500 deductible. Then you would be responsible for 20% of the remaining $10,000, which equals $2,000. So you have paid a total of $2,500 out-of-pocket.
- Then you incur another medical bill of $10,000.
- First, you would be responsible for 20% of the remaining $10,000, which equals $2,000. However, you have an out-of-pocket maximum of $4,000. And you have already paid $2,500 towards your out-of-pocket maximum and only have $1,500 to spend until you reach your maximum of $4,000. So, even though you would normally owe $2,000, you only have to pay $1,500.
Then any additional medical expense that you have during the year will be paid 100% by your insurance company, because you have met your out-of-pocket maximum
As with a deductible, keep in mind that the out-of-pocket maximum only refers to covered charges. So:
- An out-of-pocket maximum does not count charges for items that are not covered under the plan.
- An out-of-pocket maximum will not consider any payments which exceed Usual, Customary & Reasonable
- If your policy includes a limit on number of medical tests, or doctor visits, or other services, the excess are not part of the out-of-pocket maximum.
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