For most types of health insurance coverage, the Out-Of-Pocket (OOP) Maximum is exactly what you would expect given the name. It is the maximum dollar amount you will spend out of pocket in a given year on such things as deductibles, pharmacy, co-insurance, and co-pays related to in-network services. The maximum OOP is actually the number most important when shopping for a new Arizona health insurance policy, not the deductible.
Once the maximum OOP is reached on ACA qualified group and individual policies the health insurance companies pay 100% of in-network charges for the rest of the benefit period, usually the end of year. Out of network charges typically do not count toward the maximum out of pocket amount.
As mentioned, the Maximum OOP is the most important number when it comes to health insurance policies. Most individuals consider the annual deductible first when shopping for coverage and this is a mistake. It is best to consider the worst-case scenario number when choosing a plan, and that number is the maximum OOP.
In 2022 the maximum OOP on ACA individual plans is $8700 per year. The higher the maximum OOP the lower the premium. Plans with a maximum OOP of one or two thousand dollars will be very expensive. The vast majority of claims in America (95%) are under $5000, so policies with maximum OOPs under this amount will be very costly.
Two other types of health insurance policies treat Maximum OOP differently than ACA policies. Arizona Short Term health insurance policies often do not include the deductible in the maximum OOP figure, meaning you must add the deductible and maximum OOP figures to know the worst-case scenario number. The other, Medicare, doesn’t have a maximum OOP. Those with only Original Medicare coverage and no supplement plan face quite a bit of financial exposure in a worst-case scenario, which is why a Medicare supplement plan is highly recommended. Without a supplement plan the average Medicare recipient is on the hook for approximately 20% of all their healthcare costs.
Medicare Part D prescription plan policyholders recently got a bit of good news. Congress has passed legislation that will limit maximum OOP to $2000 annually beginning in 2025.
Medicare Advantage Plans have in-network maximum OOP limits of $7550 annually in 2022. Like most policies the maximum OOP usually increases each year. The $7550 figure does not include prescription costs. Whether services are received in-network or out of network the maximum OOP is $11,300 annually on these policies.