Out-of-Pocket Maximum Explained - What does my health insurance plan pay?

Wondering what an out-of-pocket maximum is? I'll explain what an out-of-pocket maximum is and how health insurance plans can protect you from excessive medical expenses in a worst-case scenario. An annual out-of-pocket maximum is the most I'd ever have to pay for qualifying health care claims in a single year. Once my total spending reaches my out-of-pocket maximum amount, let's say it's $12,000 for the year. After reaching this limit, my insurance kicks in and I'd be done paying for the year and my insurance plan would cover the rest. I want to help you understand the complete cost of health insurance, so stick around because I'll also explain a few more concepts like premiums, deductibles, co-pays, and coinsurance. As you receive care throughout the year, you'll keep adding to your out-of-pocket max, but your insurance plan will also pitch in and help you pay for services. A premium is a monthly payment that allows me to participate in my insurance plan and receive preventative care free of charge. Preventative care includes basic screenings and a general exam every year. Heads up here that a health insurance premium does not count towards your out-of-pocket maximum, but your coinsurance, co-pays, and deductibles all count toward your out-of-pocket maximum. A deductible is an amount I need to pay before my plan will start to share the cost of most services. Co-pays are predetermined rates for doctors visits, prescriptions, and procedures. Co-insurance is when I split the cost of a service with my insurance plan. Maybe they'll pay 70% of an inpatient procedure and I'll pay the other 30%. Co-insurance might be available only after a deductible is met, but that all depends on the rules of my plan. And as you know, the out-of-pocket maximum covers me in a worst-case scenario if the cost of all my payments throughout the year exceed a certain amount. The way I like to think about it is, I must meet my deductible before my plan starts helping with the cost of health services. Then I split the cost of services with my health plan until I reach my out-of-pocket maximum. Out-of-pocket maximums reset on the calendar year from January 1st to December 31st. So after the maximum is met, my insurance will cover everything else for the rest of the year until January 1st.