Which statement about out-of-pocket maximum is true?

• A. It is the cap on expenses before the plan pays 100%
• B. It is the annual premium
• C. It is the deductible amount
• D. It is the maximum coinsurance percentage

Answer: (A)

The main idea here is that the out-of-pocket maximum is the ceiling on what you pay for covered medical expenses in a policy year. It includes the amounts you pay toward the deductible, copays, and coinsurance. Once you reach that limit, the plan covers 100% of subsequent covered costs for the rest of the year. Premiums aren’t counted toward this limit, which is why the statement describing the out-of-pocket maximum as the cap you reach before the plan pays 100% is accurate. The other options refer to different concepts: the annual premium is what you pay to maintain the plan and isn’t capped by this maximum; the deductible is the amount you must pay before the plan begins sharing costs; and coinsurance is simply the share you pay after the deductible, not a maximum overall cap.