The short answer
Your deductible is what you pay for covered care before your plan starts sharing the cost. Your out-of-pocket maximum is the most you'll pay for covered in-network care in a plan year, and once you hit it, your plan pays 100% of covered benefits for the rest of that year. Both come straight from the HealthCare.gov glossary pages on the deductible and the out-of-pocket maximum. I'll walk through how they fit together so you can read a plan summary with confidence.
Why these two numbers trip people up
When you had a job with benefits, HR picked most of this for you. Once you work for yourself, you're the one reading the plan summary. The deductible and the out-of-pocket maximum sit right next to each other, and they sound alike. They do very different jobs.
How the deductible works
Think of the deductible as the starting line. Until you reach it, you generally pay for covered services yourself. After you reach it, you usually pay only a copay or coinsurance, and the insurance company pays the rest.
There are a few helpful exceptions. HealthCare.gov says all Marketplace plans pay the full cost of certain preventive benefits even before you meet your deductible. Many plans also cover things like a checkup before the deductible kicks in, so check your plan details.
How the out-of-pocket maximum works
The out-of-pocket maximum is the finish line for the year. Everything you spend on your deductible, copays and coinsurance for covered in-network care counts toward it. Once you reach it, your plan pays 100% of covered benefits until the plan year ends.
What doesn't count toward the out-of-pocket maximum
This part surprises people. HealthCare.gov lists what the limit leaves out:
- Your monthly premiums
- Services your plan doesn't cover
- Out-of-network care
- Amounts a provider charges above what your plan allows
Those last two matter a lot if you have doctors you want to keep. Staying in network is what keeps your yearly costs capped. I explained how networks differ in my post on HMO vs PPO in plain words.
Family plans have two layers
If you cover your spouse or kids, your plan may have an individual deductible for each person and a family deductible for everyone together. HealthCare.gov notes that family plans often have both. The same idea applies to the out-of-pocket limit, which has its own individual and family amounts.
How I'd use these numbers when comparing plans
Start with how your household actually uses care. If you rarely see a doctor, a higher deductible may feel fine. If someone in your family has regular visits or prescriptions, the out-of-pocket maximum tells you your worst-case year for covered in-network care.
HealthCare.gov also says plans with lower monthly premiums generally have higher deductibles, and plans with higher premiums usually have lower ones. So the right fit is a balance between what you pay every month and what you might pay when you need care.
Open Enrollment for Marketplace plans runs November 1 through January 15, so now is a good time to look. I put the Open Enrollment dates for self-employed people in one place.
FAQ
What is the difference between a deductible and an out-of-pocket maximum?
The deductible is what you pay for covered care before your plan starts sharing costs. The out-of-pocket maximum is the most you'll pay for covered in-network care in a plan year. After you reach it, your plan pays 100% of covered benefits.
Does my deductible count toward my out-of-pocket maximum?
Yes. HealthCare.gov says what you spend on deductibles, copays and coinsurance for in-network care counts toward the out-of-pocket limit.
Do my monthly premiums count toward the out-of-pocket maximum?
No. Premiums don't count, and neither does out-of-network care or anything your plan doesn't cover.
Do I have to meet my deductible before preventive care is covered?
No. HealthCare.gov says all Marketplace plans pay the full cost of certain preventive benefits even before you meet your deductible.
How do deductibles work on a family plan?
Family plans often have an individual deductible for each person and a family deductible for everyone together. Check your plan details to see how yours is set up.