What is the 'out-of-pocket maximum' on a health insurance plan?
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Explanation
The out-of-pocket maximum is the most you will pay for covered services in a plan year. Once you hit this limit (which includes your deductible, copays, and coinsurance) your insurer pays 100% of covered costs for the rest of the year. Monthly premiums do not count toward this cap.
PPO plans generally offer more flexibility in choosing healthcare providers, while HMO plans typically have lower premiums and require referrals for specialists.