Understanding Your Deductible & Out-of-Pocket Max

Health insurance can feel confusing, but two terms play a major role in how much you pay throughout the year: your deductible and your out-of-pocket maximum. Understanding how these work can help you budget confidently and make informed choices about your care.

What Is a Deductible?

Your deductible is the amount you pay for covered medical services before your insurance begins to share the cost. For example, if your deductible is $2,000, you’ll typically pay for your care out of pocket until you reach that amount. After that, your plan starts contributing based on your policy’s cost-sharing structure.

What Is an Out-of-Pocket Maximum?

Your out-of-pocket maximum is the most you will spend on covered medical expenses in a given year. This includes your deductible, copays, and coinsurance. Once you hit this limit, your insurance pays 100% of covered services for the remainder of the year.

How They Work Together

You’ll usually pay the deductible first. As you continue receiving care, your spending on copays and coinsurance adds up until you reach your out-of-pocket maximum. At that point, your plan covers everything else for the rest of the year.

Why This Matters

Knowing these numbers gives you a clearer picture of your financial responsibility and can help you choose the plan that fits your needs. Higher deductibles often mean lower monthly premiums, while lower deductibles can be helpful if you expect to use more healthcare services.

Understanding these two key components of your plan helps you use your coverage more confidently and prepare for the year ahead. If you have questions about your deductible or out-of-pocket maximum, we’re here to help you make sense of it all.

 

SC HEALTH INSURANCE | JEFF MCLEAN 843-297-0335 | www.schealthinsurance.net | info@schealthinsurance.net