Health Insurance Deductible vs. Out-of-Pocket Maximum: What’s the Difference?

When it comes to Medicare and health insurance, the terms deductible and out-of-pocket maximum are ones our advisors clarify often. So, what’s the difference between a deductible and an out-of-pocket maximum?

What Is a Deductible?

deductible is the amount you must pay before your Medicare plan will cover your health care costs. If your plan comes with a deductible, you pay for covered medical services—but only to a certain point. Past that point (your deductible), your insurance plan picks up your costs.

What Is an Out-of-Pocket Maximum?

An out-of-pocket maximum is the most an individual will have to pay for covered medical expenses in a year. It is a cap, or limit, on annual spending.

After you pay the maximum out-of-pocket costs (through deductibles, copayments, and/or coinsurance), your Medicare plan pays all covered medical expenses through the end of the plan year.

What’s the Difference Between a Deductible and an Out-of-Pocket Maximum?

An out-of-pocket maximum is a cap on your annual spending, but a deductible is a minimum you must pay before your health insurance plan covers your costs.

A deductible may or may not count towards your out-of-pocket maximum. In the case that it doesn’t, you are responsible for meeting both your deductible and your out-of-pocket limit before your health plan picks up any costs.

Our Advisors Offer Local Medicare Help

If you need Medicare help in Ohio, Kentucky, or Indiana, our advisors are a no-cost resource where you can get trusted advice. Whether you would like to explore your plan options, need help discerning health insurance terms, or have other questions, we’re here to give you answers.

For no-cost advice on your health coverage, Schedule a call with us or call 1-844-388-6565.

Already a RetireMed client? Call your client advisor team at 1-877-222-1942 or schedule a call.

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