October 19, 2026

Health care bills can feel open-ended, but most health plans put a ceiling on what you pay in a year. That ceiling is the out-of-pocket maximum. The KFF 2025 Employer Health Benefits Survey found that virtually all workers with employer coverage are in plans with an annual limit on in-network cost sharing.

This guide explains what the cap means, how it differs from your deductible, what counts toward it and what happens once you reach it. It's part of our plain-language series that starts with how health insurance works.

What is an out-of-pocket maximum?

The out-of-pocket maximum is the most you have to pay for covered services in a plan year. After you reach it, your plan pays 100% of covered, in-network care for the rest of that year.

Put simply, the out-of-pocket maximum meaning is your worst case for covered care. It includes what you pay through your deductible, copays and coinsurance.

HealthCare.gov lists the 2026 limit for Marketplace plans as $10,600 for an individual and $21,200 for a family. For 2027, the limits rise to $12,000 and $24,000. Many plans set lower caps. KFF found that among covered workers with single coverage, 12% had a limit of $2,000 or less and 21% had a limit above $6,000.

How does an out-of-pocket max work? An example

Your costs move in three stages over a plan year. First you pay your deductible. Then you share costs through copays or coinsurance. Once your total reaches the out-of-pocket maximum, the plan pays the full allowed amount for covered, in-network care.

Take a hypothetical plan with a $2,000 deductible, 20% coinsurance and a $5,000 out-of-pocket maximum. These are round example numbers, not real prices. Say you have an in-network hospital stay with an allowed amount of $40,000.

• You pay the first $2,000 as your deductible.
• You then owe 20% coinsurance. On the remaining $38,000 that would be $7,600, but your cap is $5,000, so you pay $3,000 more and stop.
• The plan pays the remaining $35,000.
• For the rest of the plan year, covered in-network care costs you nothing more, though you still pay your premium.

Your total for the year: $5,000, the plan's out-of-pocket maximum.

Deductible vs out-of-pocket max: what's the difference?

Your deductible and your out-of-pocket maximum are both yearly amounts, but they do different jobs. The deductible is what you pay before your plan starts sharing costs. The out-of-pocket maximum caps everything you pay for covered care, the deductible included.

So the difference between deductible and out-of-pocket limits is where each sits in the year. The deductible is the first stage. The out-of-pocket maximum is the finish line.

Does the deductible count toward the out-of-pocket maximum? Yes. What you pay toward your deductible for covered, in-network care also counts toward the cap, so the cap is never smaller than the deductible. Our guide to how your deductible works covers the first stage in detail.

What counts toward your out-of-pocket maximum

For covered, in-network care, three kinds of spending count toward the out-of-pocket maximum:

• Your deductible
• Copayments, the fixed amounts you pay for a visit or prescription
• Coinsurance, your percentage of the allowed amount after the deductible

Do copays count toward the out-of-pocket maximum? Yes, for covered in-network services. Some plans don't apply certain copays to the deductible, but those copays still count toward the yearly cap.

Your insurer can tell you how much you've paid toward each amount so far this year.

What doesn't count toward the out-of-pocket maximum

Some costs never count toward the out-of-pocket maximum, even after you reach it:

• Your monthly premium
• Services your plan doesn't cover
• Out-of-network care
• Charges above the allowed amount that a provider may bill you for, called balance billing

That's why the in-network out-of-pocket maximum protects you only inside your plan's network. Check your plan documents to see whether out-of-network care has its own limit. Federal No Surprises Act protections cover unexpected out-of-network bills for emergency care and for some care at in-network hospitals and surgery centers.

Family plans: individual and family limits

A family plan's Summary of Benefits and Coverage shows an individual out-of-pocket limit and a family limit. For 2026 Marketplace plans, the family out-of-pocket maximum can be as high as $21,200.

Ask whether the individual limit is embedded. With an embedded out-of-pocket maximum, one family member who reaches the individual limit has covered in-network care paid in full, even if the family hasn't reached its total. Other family members keep sharing costs until they hit their own limit or the family reaches the family total.

Is there a Medicare out-of-pocket maximum?

It depends on how you get Medicare. Original Medicare has no yearly limit on what you pay out of pocket unless you have supplemental coverage, such as Medigap, Medicaid, or employer or union coverage, according to Medicare.gov.

Medicare Advantage plans work differently. Each plan has a yearly out-of-pocket maximum for covered Medicare services, and the limit can differ for in-network and out-of-network care. Once you reach it, you pay nothing for covered services for the rest of the year.

What happens when you reach your out-of-pocket maximum

Once you reach your out-of-pocket maximum, your plan pays 100% of covered, in-network services until the plan year ends. You still owe your premiums, and anything uncovered or out of network is still yours to pay.

The cap resets at the start of the next plan year, which may not match the calendar year. If you have a planned procedure, timing can matter, so ask your insurer what your share is likely to be before you schedule. Our checklist of questions to ask your surgeon includes the cost questions worth raising early.

Know your cap before you need care

Your out-of-pocket maximum tells you the most a hard year could cost for covered, in-network care. Find it on your Summary of Benefits and Coverage, check whether family members have embedded limits, and stay in network so your spending counts.

When you're ready to choose a specialist, browse doctors on DocFinderPro and confirm with your plan that they're in network before your first visit.