Health Insurance Deductible vs. Out-of-Pocket Max in 2024

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Updated: May 22, 2024

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Understanding the difference between your deductible and out-of-pocket max can help you manage your finances better. But most policyholders aren’t sure about the difference between a deductible and the out-of-pocket max. MoneyGeek’s guide explores these two concepts in detail to help you better understand your health insurance policy.

Let’s begin with the deductible. It’s the amount you pay before your insurer starts sharing your health care expenses. Deductible limits vary depending on your policy. For example, a Silver marketplace plan has an average health insurance deductible of $4,236. Cost-sharing between you and your insurer begins once you’ve spent that amount on covered health expenses.

Your MOOP indicates the highest possible amount you’ll spend on health care using your own funds. For instance, a 40-year-old man with a Silver plan has an average MOOP of $7,954. Once he reaches the limit, his insurance provider begins covering all his medical costs.

It’s good to remember that your premium doesn’t count towards either your deductible or MOOP, so paying it doesn’t get you closer to these limits. A premium is more like a monthly subscription fee that allows you to access your health plan.

Key Takeaways

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You must hit your deductible limit before your insurer begins sharing the cost of your health expenses. On average, a Silver marketplace plan has a deductible of $4,236.

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Your out-of-pocket max is the most you’ll spend on health care each year. Typically, marketplace plans have an average MOOP limit of $7,954.

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Plans with lower MOOP limits have higher premiums because your insurer starts covering your medical expenses sooner. The amount of care you need determines the best deal you can get.

How Do Deductibles Work for Health Insurance?

Even if you have health insurance, your insurer doesn’t necessarily help with your medical expenses immediately. You’ll have to pay for these out of pocket until you reach your plan limits. Deductibles for 2022 marketplace plans can range from $0 to $8,700 for individuals or $0 to $17,400 for families.

Let’s use a real-life example so you'll have a better idea of how your health insurance deductible works. Let’s say that you have your plan has the following elements:

  • Monthly premium: $475
  • Deductible: $2,500
  • Co-insurance: 20%
  • Out-of-pocket max: $8,000

Based on that information, you know that you spend $475 each month on your health plan. You’ll continue to pay for all medical expenses your policy covers out of pocket until you’ve spent $2,500. After this, your insurer begins sharing your costs.

Because you have 20% co-insurance, they cover 80% of your expenses. As you continue to pay for part of your health costs, the amount you spend out of pocket increases. Once you’ve spent $8,000, your insurer begins paying for 100% of your expenses.

Regardless of where you purchased your health insurance plan, most of them have deductibles.

Health Insurance Deductible Example
A Health Insurance Deductible example

What Does a Health Insurance Deductible Cover?

Understanding the meaning of a health insurance deductible includes knowing the costs that bring you closer to your limit. These include:

  • Hospitalization and surgery
  • Imaging, labs and the use of specific medical devices
  • All in-network services

Prescription coverage may be included, depending on your plan. Generally, ACA plans shoulder costs from preventive services like annual check-ups or screenings before you reach your deductible. However, any expenses from out-of-network services don’t count towards your deductible.

What Is a Good Deductible for Health Insurance?

A high deductible health plan (HDHP) may have you paying out of pocket all year, but if you’re young and need less medical care, it might be a cheaper option. These plans usually have lower premiums. However, someone who frequently accrues health costs may prefer a lower deductible.

Although most policies have deductibles, there is such a thing as no deductible health insurance. The advantage is your insurance provider will share in your costs immediately. However, these plans tend to be more expensive. You may want to check how much you typically spend for medical care in a year and see how the cost compares to 12 months of premiums.

Comparing plans before purchasing one helps you find affordable health insurance since there’s no exact amount that pinpoints an appropriate deductible. Ultimately, your medical needs determine what works best for you, and a little research can result in a cost-effective deal.

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A health insurance plan with a low deductible can sound attractive because your insurer begins sharing medical expenses sooner. However, these plans typically come with higher monthly premiums. If you’re in good health and seldom need medical care, you may be paying so much each month without maximizing your coverage.

Having a high deductible health plan could be a better fit. Although you’ll pay most (if not all) of your medical care out of pocket, you’ll have a more affordable premium.

What Does Out-of-Pocket Max Mean?

Let’s continue exploring the difference between the deductible and out-of-pocket max.

The out-of-pocket max is the highest possible amount you will spend on health care, and you’ll notice that it’s higher than your deductible. MOOP limits vary between Affordable Care Act plans, but they all have an annual out-of-pocket maximum with upper limits that the federal government regulates. The highest possible out-of-pocket maximums for 2022 are $8,700 per individual and $17,400 per family. No plan can have a limit exceeding those figures.

Once you’ve reached your MOOP, your insurer will begin covering 100% of your covered medical expenses and will continue to do so for the rest of the year. Once the year ends and you start a new plan, your MOOP resets.

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The value of knowing the details of your plan goes beyond determining the difference between your deductible and out-of-pocket max. Health insurance plans aren’t the same. Some outpatient costs are 100% covered by one plan but only partially covered by another. It’s possible that some plans won’t cover particular expenses at all.

What Expenses Go Toward an Out-of-Pocket Max?

Most health costs go toward your MOOP, but not all of them. Those excluded are as follows:

  • Your premium
  • Any service your plan doesn’t cover
  • Service and care from out-of-network providers

Timing can be crucial. Let’s say you have a $2,500 deductible, an $8,000 out-of-pocket max and 20% co-insurance. In January 2022, you’re involved in an accident and rack up $20,000 in medical bills.

You’ll hit your calendar year out-of-pocket maximum once you pay $8,000. Your insurer pays for the rest and will continue to shoulder covered expenses until the year ends.

However, the only expenses your insurance provider would shoulder above your MOOP are those incurred within the month if the same accident happened in December.

What Applies to Your Out-of-Pocket Max



In-Network Services

Out-of-Network Services







Deductible vs. Out-of-Pocket Max: A Cost Comparison

The average cost of health insurance varies from policy to policy, and it’s the same for deductibles and maximum out-of-pocket limits. For example, a Platinum plan, which usually has a more expensive premium, may only have a $170 deductible, while a Catastrophic plan’s deductible can go as high as $8,549.

Out-of-pocket limits follow a similar pattern, although the discrepancy isn’t as drastic. Catastrophic plans have an average MOOP of $8,549, while they’re only about $3,501 for Platinum plans.

Deductible vs. Out-of-Pocket Max by Plan (Marketplace Plans)

Average Deductible





Average Out-of-Pocket Max





In addition to the type of plan you purchase, where you get your health insurance also affects how much deductible or MOOP you have. Remember, you don’t always have to buy your policy from the marketplace.

You may qualify for Medicare, Medicare Advantage or Medicaid. You may be eligible for health insurance sponsored by your employer.

An excellent strategy to determine the best health insurance plan for you is knowing how much you can afford to pay if you experience a major medical emergency.

Frequently Asked Questions About the Deductible and Out-of-Pocket Maximum

Health insurance is a broad topic and can often confuse buyers and policyholders. There are multiple concepts to understand, and part of this is differentiating between a deductible vs. an out-of-pocket maximum. MoneyGeek’s guide includes the most commonly asked questions about this subject.

Does my out-of-pocket maximum include my deductible?
Do copays count toward my out-of-pocket max?
What happens when you meet your deductible and out-of-pocket max?
Do you pay a copay after your out-of-pocket maximum is met?

About Mark Fitzpatrick

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Mark Fitzpatrick has analyzed the property and casualty insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. Currently, he leads P&C insurance content production at MoneyGeek. Fitzpatrick has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.

Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.