What Is a Maximum Out-of-Pocket (Max OOP)?

The Maximum Out-of-Pocket, often called the Max OOP, may be the most important number on a health plan.

Yet many employees don't even know it exists.

What Is the Maximum Out-of-Pocket?

The Maximum Out-of-Pocket is the most an employee will pay for covered in-network healthcare during a plan year.

Once that limit is reached, the health plan generally pays 100% of covered in-network services for the remainder of the year.

What Counts Toward the Maximum?

Depending on the plan, amounts that may count include:

• Deductibles
• Copays
• Coinsurance

Premiums generally do not count toward the maximum.

Neither do non-covered services or most out-of-network expenses.

Example

Suppose your plan has:

• $2,000 deductible
• 20% coinsurance
• $7,500 Maximum Out-of-Pocket

Even if you incur $300,000 in covered medical expenses, once you've paid $7,500 in eligible out-of-pocket costs, the health plan generally pays 100% of additional covered in-network expenses for the rest of the plan year.

That's why the Maximum Out-of-Pocket serves as an important financial safety net.

Why Employers Should Pay Attention

Many employers focus on premiums.

Others compare deductibles.

But the Maximum Out-of-Pocket often determines an employee's financial exposure during a serious illness or accident.

Two plans with similar premiums may have dramatically different Max OOP amounts.

Understanding this number helps employers select benefits that provide meaningful financial protection for their workforce.

The Bottom Line

When comparing health plans, don't focus on just one number.

Look at all three:

Copays and Coinsurance determine what employees pay each time they receive care.

The Deductible determines when the plan begins sharing costs.

The Maximum Out-of-Pocket limits an employee's total financial exposure during the year.

Together, these three cost-sharing features define how affordable a health plan truly is—not just its monthly premium.