What does “out-of-pocket maximum” mean?

The term "out-of-pocket maximum" refers to the highest amount of money that an individual is required to pay for covered healthcare services during a given plan year. This figure is crucial for consumers, as once they reach this limit, their health insurance plan will cover 100% of the costs for covered services for the remainder of the year. This protects consumers from excessive medical expenses and provides a clear financial cap on their potential healthcare costs.

In this context, the out-of-pocket maximum typically includes various costs such as deductibles, copayments, and coinsurance, but it does not include monthly premiums or expenses for services not covered by the insurance plan. This helps individuals budget for their health expenses and ensures they are not faced with financial hardship due to unforeseen medical needs.

The other options are focused on different aspects of healthcare costs—total costs, preventive services, and consultation fees—but do not specifically define the concept of an out-of-pocket maximum in the same way. Understanding this concept is essential for navigating health insurance, as it directly impacts a person's financial responsibility regarding medical care.