If you fear that one health emergency will leave you paying bills forever and ruin your finances, the Affordable Care Act is the way to go. The ACA does as the name implies. It makes it possible for health insurance to be cheap for everyone. Part of the ACA is the out of pocket maximum, which is a key component of ACA that does not allow you to pay more than a certain amount on health care on a yearly basis.
What is an out of pocket maximum?
An out of pocket maximum is the maximum amount of money that you will ever pay in a single year for health care costs. After the maximum has been reached you will no longer need to pay for healthcare and your insurance will cover the full amount of the costs. It is important to know that the insurance premium does not contribute towards this out of pocket maximum. The way you meet the out of pocket maximum is through the payment of deductibles, coinsurance and copayments.
Do all health insurance plans have an out of pocket maximum?
Not all plans have deductibles, but they all have out of pocket maximums. The ACA made it so consumers would have that protection built in. Now every health insurance has an annual maximum.
Out of pocket maximums are limits on the amount an individual or family will ever pay in a year on health care. Once you meet the out of pocket maximum your health insurance will take care of the remainder of the costs.
For more information on insurance plans look here.