What does the term "out-of-pocket maximum" refer to?

The term "out-of-pocket maximum" refers specifically to the highest amount a consumer will pay for covered health care services within a given plan year. Once this maximum is reached, the insurance plan typically covers 100% of the costs for any additional covered medical services for the remainder of the year. This concept is crucial for consumers as it provides a limit on their financial exposure in case of high medical expenses, offering important protection against catastrophic health costs.

In this context, the out-of-pocket maximum ensures that individuals do not face insurmountable costs due to unforeseen health issues, allowing them peace of mind regarding their financial liability for health care expenses. Understanding this term helps consumers make more informed decisions about their health insurance and budgeting for potential medical costs.