What Is an Out-of-Pocket Maximum in Health Insurance?

Key Takeaways

The out-of-pocket maximum caps your annual cost-sharing for covered in-network services, not all health spending.

ACA plans cap the out-of-pocket maximum at $10,600 per enrollee in 2026, per CMS.

Your deductible, copays and co-insurance count toward the out-of-pocket maximum. Your monthly premium does not.

Plans with a lower out-of-pocket maximum carry higher premiums but cap your annual exposure to unexpected medical bills.

What Is Maximum Out-of-Pocket (MOOP)?

Your out-of-pocket maximum or maximum out-of-pocket caps only what you pay in cost-sharing for covered, in-network services. Once you reach the cap, your plan covers 100% of those costs for the rest of the plan year. Premiums don't count toward it. Out-of-network bills don't apply on most plans. Services your plan excludes entirely aren't included. What counts is your deductible, copays and co-insurance for covered care from in-network providers.

ACA plans must set an individual out-of-pocket maximum no higher than $10,600 and a family limit no higher than $21,200 in 2026.
The limit resets every January 1, regardless of when you enrolled during the year.
High-deductible health plans have a separate, lower IRS-set MOOP limit: $8,500 for self-only coverage and $17,000 for families in 2026, per IRS Rev. Proc. 2025-19.
Employer-sponsored plans may set limits below the ACA cap, giving you a lower ceiling than a Marketplace plan at the same metal tier.

Deductibles, premiums and out-of-pocket maximums together determine the true annual cost of health insurance and each figure shifts differently based on the metal tier and plan type.

How Does an Out-of-Pocket Maximum Work?

Your out-of-pocket maximum accumulates as you pay covered in-network bills throughout the plan year. Your insurer tracks each deductible payment, copay and co-insurance charge across all claims automatically. Once the running total reaches the annual cap, your plan pays 100% of covered in-network services for every remaining claim in the plan year. Your deductible is the first cost your insurer applies to this running total and it resets on January 1 of each plan year regardless of when you enrolled.

A standard Silver plan with a $2,000 deductible, 20% co-insurance and a $7,000 out-of-pocket maximum:

1
You Pay the Full Deductible First
You pay $2,000 in covered care to satisfy your deductible. Your insurer pays nothing toward those early bills, but every dollar counts toward your $7,000 out-of-pocket maximum, bringing your running total to $2,000.
2
Co-insurance Starts After the Deductible
Your next covered bill is a $5,000 hospital claim. With 20% co-insurance, you pay $1,000 and your insurer pays $4,000. Your MOOP running total climbs to $3,000 while your plan covers 80% of each subsequent bill.
3
Copays and Co-insurance Continue to Accumulate
Over the following months, office visit copays, specialist fees and prescription co-insurance add to your running total with every covered in-network claim. Each payment closes the gap between your current balance and the $7,000 annual cap until your plan takes over entirely.
4
Your Insurer Covers 100% Once You Hit the Cap
Once your cumulative payments reach $7,000, your plan covers 100% of covered in-network services for every remaining claim through December 31. You owe nothing in deductibles, copays or co-insurance on covered in-network care for the rest of the year.

What Counts Toward Your Out-of-Pocket Maximum

Three types of cost-sharing payments count toward your out-of-pocket maximum on ACA-compliant plans: your deductible, copays and co-insurance. Your deductible is the largest contributor for most enrollees because it must be satisfied in full before most benefits begin.

Once you've met your deductible, copays and coinsurance accumulate with each covered visit, which is exactly how health insurance works regardless of plan type or metal tier.

Deductible Payments

Your deductible is the fixed annual amount you pay for covered care before your plan starts covering most services. Every dollar applied to your deductible counts toward your out-of-pocket maximum. On a plan with a $10,600 MOOP and a $2,000 deductible, satisfying the deductible puts you $2,000 of the way to your annual cap.

Copay Charges

A copay is a set dollar amount you pay for a covered service, such as $30 for a primary care visit or $50 for a specialist and every copay counts toward your MOOP on ACA-compliant plans. Copays apply at the time of service, sometimes before the deductible depending on plan design.

On Silver plans where both copays and coinsurance apply, the copay covers the per-visit fee while coinsurance applies to the remaining balance, a split the coinsurance vs. copay rules apply to differently for each service type.

Co-insurance Charges

Co-insurance is your percentage share of covered costs after meeting your deductible. At 20% co-insurance on a $5,000 bill, you pay $1,000 and your plan pays $4,000: that $1,000 counts toward your MOOP. ACA metal tiers set different co-insurance rates: Bronze plans carry roughly 40% co-insurance after the deductible while Gold plans carry roughly 20%. Your co-insurance rate determines how fast you close the gap between your deductible and the MOOP on any covered claim.

What Your Out-of-Pocket Maximum Does Not Cover

Your out-of-pocket maximum does not count four categories of cost toward your annual cap: monthly premiums, out-of-network charges on most plans, non-covered services and balance billing from out-of-network providers. Premiums are entirely separate from cost-sharing and continue regardless of how much covered care you've received. Balance billing is the most financially dangerous gap because those charges aren't tracked against the MOOP and carry no federal cap for elective out-of-network care, even after the No Surprises Act took effect in January 2022.

Monthly Premium

Your monthly premium is the fixed cost you pay to maintain active coverage. It doesn't count toward your out-of-pocket maximum because it isn't a cost-sharing payment tied to care received. Premiums continue even after you've reached your MOOP for the year.

Out-of-Network Provider Charges

On HMO and EPO plans, out-of-network care isn't covered except in emergencies, so those costs fall entirely on you outside the MOOP. On most PPO plans, out-of-network costs accumulate toward a separate out-of-network limit, not your in-network cap. Either way, out-of-network charges don't reduce your in-network out-of-pocket maximum balance.

Non-Covered Services

Services your plan excludes from coverage entirely — such as elective cosmetic procedures or drugs not on your plan's formulary — aren't subject to the out-of-pocket maximum. You pay 100% of those costs regardless of how much covered care you've already received in the plan year.

Balance Billing Charges

When an out-of-network provider bills you the difference between their fee and what your plan paid, those charges don't count toward your MOOP. The No Surprises Act limits balance billing for emergency services and certain non-emergency care at in-network facilities, but elective out-of-network visits carry no federal balance billing cap. Always confirm a provider is in-network before scheduling non-emergency care.

Out-of-Pocket Maximum vs. Deductible: What's the Difference?

The deductible and out-of-pocket maximum serve different functions. The deductible is what you pay before most benefits begin. The out-of-pocket maximum is the annual cost-sharing ceiling: $10,600 for self-only ACA coverage in 2026. Your deductible always counts toward that cap and is always the lower of the two figures.


Definition	The fixed annual amount you pay for covered care before your plan starts covering most services.	The annual ceiling on all in-network cost-sharing for covered services, including your deductible.
When it applies	From the first covered claim of the plan year.	After your deductible plus all subsequent copays and co-insurance reach the annual cap.
2026 ACA limit (individual)	No federal ACA cap on the deductible amount for most plan types.	$10,600, per CMS.
Does one count toward the other?	Yes. Deductible payments count toward the MOOP.	The MOOP is the final limit; it doesn't count toward anything above it.
Real-world example	With a $2,000 deductible, you pay the first $2,000 of covered care.	With a $6,500 MOOP, your total cost-sharing stops at $6,500 for the plan year.

What Is the Out-of-Pocket Maximum for 2026?

CMS and the IRS each set annual out-of-pocket maximum limits for different categories of health plans. For 2026, CMS set the ACA individual limit at $10,600 and the family limit at $21,200. HDHPs must meet a separate, lower IRS limit to qualify for health savings account pairing: $8,500 for self-only coverage and $17,000 for families. Employer plans may set lower limits within these federal ceilings.


ACA Marketplace plan (self-only)	$10,600
ACA Marketplace plan (family)	$21,200
HDHP (self-only, for HSA eligibility)	$8,500
HDHP (family, for HSA eligibility)	$17,000
ACA-compliant employer-sponsored plan	At or below the ACA self-only and family caps.

An HDHP's lower MOOP means you reach 100% coverage faster in a high-use year, which is one reason HDHPs pair well with a health savings account for enrollees who want a tax-free reserve for covered medical costs. The average cost of health insurance by metal tier shapes how a plan's MOOP and monthly premium relate to each other for the same coverage profile.

How Much Out-of-Pocket Maximum Do You Need?

Choosing the right out-of-pocket maximum involves a direct trade-off between monthly premium and annual financial risk. A lower MOOP caps your exposure during a high-use year but comes with a higher monthly premium. A higher MOOP costs less monthly but leaves more potential exposure if you need substantial care. Gold plans cap cost-sharing at a lower MOOP than Bronze plans but charge a higher monthly premium, the core variable in any best health insurance comparison for high-use enrollees.

When a Lower Out-of-Pocket Maximum Makes Sense

You Have a Chronic Condition or Take Ongoing Medications

If you see specialists regularly or manage a chronic illness, you'll likely satisfy your deductible early and continue paying co-insurance throughout the year. A lower MOOP stops that accumulation sooner and gives you a firm ceiling on total annual cost-sharing.

You're Expecting a Major Procedure or Hospital Stay

Inpatient care generates large bills quickly. Co-insurance on a $100,000 surgery at 20% reaches $20,000 before the MOOP stops it. A plan with a $4,000 MOOP instead of a $10,000 MOOP saves you $6,000 in a single high-claim year.

A Large Unexpected Medical Bill Would Cause Financial Hardship

Paying $10,600 out of pocket would strain many household budgets. A lower MOOP gives you a predictable cap. Paying an extra $100 per month ($1,200 annually) to cut your MOOP by $5,000 is a reasonable trade-off for enrollees without a huge emergency fund.

When a Higher Out-of-Pocket Maximum May Work

You're Healthy and Rarely Use Care Beyond Preventive Visits

Enrollees whose annual spending amounts to one checkup and no other claims will spend far less than any MOOP threshold for the year. Paying a higher premium for a lower MOOP costs more than you'll save in most low-use years. The most affordable health insurance options carry higher MOOPs than Gold plans but lower monthly premiums: the right trade-off for low-use enrollees who want to keep fixed costs down.

You're Pairing Your Plan With an HSA

HDHP enrollees who contribute to a health savings account can use pre-tax dollars to cover care up to the MOOP. The tax advantage offsets the higher out-of-pocket exposure, making a higher-MOOP HDHP cost-effective for enrollees who maximize contributions each year. An HSA has different contribution limits and rollover rules than a flexible spending account and FSA vs. HSA covers which account type qualifies for HDHP pairing.

Your Out-of-Pocket Maximum: What It Means for Your Coverage

The out-of-pocket maximum is the ceiling on your annual cost-sharing for covered in-network care. In 2026, that ceiling is $10,600 per enrollee on ACA plans, per CMS. Your deductible, copays and co-insurance all count toward it. Premiums don't. Choosing a plan with a lower MOOP trades a higher premium for a firm annual cap on what you'll owe.

MOOP: FAQ

We've answered the most frequently asked questions about the out-of-pocket maximum in health insurance, including annual resets, family limits, prescription drug costs and what happens after you hit the cap:

Does the out-of-pocket maximum reset every year?

Your out-of-pocket maximum resets on January 1 of each plan year, not on your enrollment anniversary. Cost-sharing paid in the prior year doesn't carry forward. Mid-year enrollees' payments count toward the current year's cap and reset on the following January 1.

How does the family out-of-pocket maximum work differently from the individual limit?

Family plans carry both an embedded self-only limit and a combined family cap. Once any member satisfies their individual MOOP, that person pays nothing more for covered in-network care, even if the family total hasn't reached the combined cap yet.

Do prescription drug costs count toward the out-of-pocket maximum?

On ACA-compliant plans, copays and co-insurance for formulary drugs count toward your out-of-pocket maximum. Non-formulary drugs are excluded from coverage and don't apply toward the MOOP. Employer-sponsored plans sometimes track prescription drug costs separately, so confirm your plan documents.

Can you still owe money after reaching your out-of-pocket maximum?

Reaching your MOOP means your plan covers 100% of covered in-network services for the rest of the year. Your monthly premium continues regardless. Out-of-network charges and non-covered services remain your full financial responsibility even after you hit the cap.

Does Medicare have an out-of-pocket maximum?

Original Medicare has no out-of-pocket maximum, leaving annual cost exposure potentially unlimited without supplemental coverage. Medicare Advantage plans must cap in-network Part A and B costs at no more than $9,250 in 2026, per CMS. Medicare Supplement plans cover many gaps Original Medicare leaves without a ceiling.

How does the out-of-pocket maximum work differently on an HDHP?

On a high-deductible health plan, the IRS caps your MOOP at $8,500 for self-only coverage and $17,000 for families in 2026, per IRS Rev. Proc. 2025-19. Both are below the ACA cap of $10,600, but HDHP enrollees pay from the first dollar on a higher deductible.

About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. He has analyzed the insurance market for over five years, conducting original research for insurance shoppers. His insights have been featured in CNBC, NBC News and Mashable.

Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!

He writes about economics and insurance, breaking down complex topics so people know what they're buying.

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