Your deductible is what you pay before the insurance plan starts sharing costs. Your out-of-pocket maximum is the most you can pay in a plan year — once you hit it, the insurer covers 100% of covered in-network costs for the rest of the year.
Two of the most important numbers in any health insurance plan are the deductible and the out-of-pocket maximum (OOPM). They measure different things: the deductible is a floor (you pay this before coverage activates); the OOPM is a ceiling (you pay no more than this in a plan year for covered in-network care). The HealthCare.gov glossary and CMS provide the federal definitions and applicable limits.
The deductible is the amount you pay 100% out of pocket for covered services before the plan begins sharing costs. If your deductible is $2,000 and you have a $500 lab bill and a $700 specialist visit, you pay $1,200 — and the remaining $800 still needs to be met before cost-sharing (coinsurance or copays) kicks in. Most plans exempt certain preventive services from the deductible, covering them at 100% regardless of whether you've hit the threshold.
The out-of-pocket maximum is the hard cap on what you pay in a plan year for covered in-network services. Once your deductible payments, copays, and coinsurance add up to your OOPM, the insurer pays 100% of covered in-network costs for the rest of the year. For 2026, the ACA requires OOPM limits for individual coverage to not exceed $9,200 and $18,400 for family coverage (limits indexed annually by CMS). Premiums, out-of-network costs, and costs for non-covered services do not count toward the OOPM.
A low deductible is not the same as a low OOPM — and a high-deductible plan doesn't always mean a high OOPM. A plan with a $6,000 deductible and a $7,000 OOPM means only $1,000 of coinsurance exposure after you hit the deductible. A plan with a $1,500 deductible and a $9,200 OOPM means significant cost-sharing exposure after the deductible. The KFF Health Insurance Marketplace Calculator helps compare total annual cost estimates across plan tiers.
The OOPM applies to covered in-network services. Out-of-network costs may not count toward your OOPM at all, depending on the plan type. In a strict HMO or EPO, out-of-network care is typically not covered except for emergencies. In a PPO, you may have a separate out-of-network deductible and OOPM — usually much higher. Always confirm in-network status before receiving non-emergency care.
Browse all answers
More answers to common questions about financing, banking, and credit.