An out-of-pocket maximum is the most you’ll pay for covered medical services in a single plan year. For 2026 Marketplace plans, that cap is $10,600 for an individual and $21,200 for a family. Once your spending hits that number, your insurance covers 100% of covered services for the rest of the year.
How the Out-of-Pocket Maximum Works
Every time you pay a deductible, a copayment at the doctor’s office, or your share of coinsurance after a procedure, those dollars accumulate toward your out-of-pocket maximum. Think of it as a running tab. Once the tab reaches the limit your plan sets, the insurance company picks up the full cost of any additional covered care through the end of your plan year, which typically resets on January 1.
This matters most in years when you face serious medical expenses: a surgery, a cancer diagnosis, the birth of a child, or a chronic condition requiring expensive medication. Without this cap, your 20% coinsurance on a $200,000 hospital stay would be $40,000. With an out-of-pocket maximum, your total cost stops at whatever your plan’s limit is.
What Counts Toward the Limit
Three types of spending count toward your out-of-pocket maximum:
- Deductibles: the amount you pay before insurance kicks in
- Copayments: flat fees you pay per visit or prescription
- Coinsurance: your percentage share of a covered service
All of these must be for in-network, covered services to count. If your plan doesn’t cover a particular treatment, what you pay for it won’t move you any closer to your maximum.
What Doesn’t Count
Your monthly premium never counts toward the out-of-pocket maximum. You’ll keep paying that regardless of how much medical care you use. Charges for services your plan doesn’t cover, like cosmetic procedures, also stay off the tally. If you go to an out-of-network provider and your plan charges you more for it, the extra cost typically doesn’t count either. Balance billing, where an out-of-network provider charges you the difference between their rate and what your insurer pays, is another common expense that falls outside the cap.
Preventive care services that are covered at no cost under the Affordable Care Act, such as annual checkups, certain screenings, and vaccinations, don’t factor into the equation at all. You pay $0 for those regardless of whether you’ve met your deductible, so there’s nothing to accumulate.
In-Network vs. Out-of-Network Limits
Most plans set separate out-of-pocket maximums for in-network and out-of-network care. The in-network limit is the one governed by federal caps. The out-of-network limit, if your plan even covers out-of-network providers, is almost always higher and has no federal ceiling. Spending on out-of-network care generally does not count toward your in-network maximum, so you could hit one without making progress on the other.
If staying within your out-of-pocket maximum matters to you, sticking with in-network providers is the simplest way to ensure every dollar you spend counts toward the cap.
Family Plans: Embedded vs. Aggregate
Family plans add a layer of complexity because there are two ways the out-of-pocket maximum can be structured. An aggregate limit means the family shares one single maximum. It doesn’t matter which family member racks up the charges. Once the family’s combined spending hits the number, everyone is covered at 100%. In theory, one person’s expensive surgery could hit the family maximum on its own, benefiting the whole household.
An embedded limit works differently. Each family member has their own individual maximum nested inside the larger family cap. Once one person hits the individual limit, that person’s care is covered at 100% even if the rest of the family hasn’t come close. This protects against a scenario where one family member needs expensive care but the aggregate family limit is too high for them to reach alone. Most Marketplace and employer plans use an embedded structure, but check your Summary of Benefits and Coverage to confirm which type you have.
How It Differs From a Deductible
People often confuse the out-of-pocket maximum with the deductible, but they serve different purposes. Your deductible is the amount you pay before insurance starts sharing costs. Your out-of-pocket maximum is the point where insurance takes over completely. The deductible is a subset of the maximum: what you spend on your deductible counts toward the out-of-pocket cap, but reaching the deductible doesn’t mean you stop paying. After the deductible, you typically still owe copayments or coinsurance until you reach the maximum.
A quick example: say your plan has a $2,000 deductible, 20% coinsurance, and a $8,000 out-of-pocket maximum. You’d pay the first $2,000 yourself. After that, you pay 20% of each bill while your insurer covers 80%. Once your combined deductible and coinsurance payments reach $8,000, you pay nothing more for covered care that year.
Choosing a Plan Based on the Maximum
Plans with lower monthly premiums tend to have higher out-of-pocket maximums, and vice versa. If you’re generally healthy and rarely use medical services, a high-maximum plan with lower premiums might save you money most years. But if you know you’ll have significant medical expenses, such as a planned surgery or ongoing treatment, a plan with a lower out-of-pocket maximum could cap your total spending at a more manageable level, even if the monthly premium is higher.
The best way to compare is to estimate your total annual cost under each plan: 12 months of premiums plus the out-of-pocket maximum as a worst-case scenario. The plan with the lowest combined total gives you the best financial protection if something unexpected happens. For years when you stay healthy, compare premiums plus your expected copays and deductible instead.