Out-of-Pocket Maximum
The most a patient pays for in-network covered services in a plan year, after which the insurance plan pays 100% of covered services.
Out-of-Pocket Maximum is a term from U.S. hospital cost and quality reporting — the field that produces the CMS Hospital Compare program, the Medicare Inpatient Payment files, and the patient-facing tools built on top of them. The definition below covers what the term means in CMS files, what it does not mean, and how it interacts with the other measures CMS publishes. On the LakeQuality value rubric, Out-of-Pocket Maximum is one of the inputs (directly or indirectly) to the combined cost-and-quality grade. Understanding how the term is computed at CMS — what counts and what does not — is part of reading hospital pages defensibly.
Each hospital page on LakeQuality surfaces the specific Out-of-Pocket Maximum value for that facility (when CMS reports one), so the general definition here translates into a concrete data point on the per-hospital pages you actually use.
How It Works
The out-of-pocket maximum (also called out-of-pocket limit or OOP max) is a critical financial protection in health insurance, capping a member's annual exposure to covered medical costs. Under the Affordable Care Act, all ACA-compliant non-grandfathered plans must include an OOP maximum, and the federal government sets an annual ceiling. For 2025 the ACA OOP maximum ceiling is $9,200 for self-only coverage and $18,400 for family coverage. HSA-qualified High Deductible Health Plans (HDHPs) have lower required maxes of $8,300 self-only and $16,600 family in 2025. Employer plans, which cover most Americans under 65, may have lower limits, typical employer plan self-only OOP max in 2024-2025 runs $3,500-$6,500 based on Kaiser Family Foundation employer benefits survey data. Medicare Advantage plans are now required to set an OOP max of no more than $9,350 for in-network care in 2025 (and $14,000 combined in/out). Traditional Medicare Parts A and B have no OOP max, which is why 90% of beneficiaries either buy Medigap, have employer retiree coverage, or enroll in Medicare Advantage. The OOP max counts deductibles, copays, and coinsurance for covered in-network services; it typically excludes premiums, out-of-network charges (for plans with out-of-network limits that are higher), non-covered services, and balance billing that survives No Surprises Act protections. For patients facing major surgery or long hospitalizations, understanding the OOP max is essential: a patient with $5,500 OOP max and a $150,000 hospital bill will pay $5,500 total, with the insurer covering the remaining $144,500 (subject to negotiated rates, not chargemaster). HDHP enrollees should weigh OOP max against HSA contributions; the 2025 HSA contribution limits are $4,300 self-only and $8,550 family.
Related Terms
- Deductible (Health Insurance), The amount a patient must pay for covered healthcare services before the insurance plan begins to pay, ranging from $0 for some plans to $7,000+ for high-deductible plans.
- Surprise Medical Bill (Balance Billing), An unexpected bill from an out-of-network provider for the difference between the provider's charge and the insurance payment, largely prohibited for most scenarios since the No Surprises Act took effect January 1, 2022.
- Balance Billing, The practice of a provider billing a patient for the difference between the provider's charge and what the insurer paid, now largely prohibited in emergency and many in-network-facility scenarios under the No Surprises Act.
- Medicare Advantage (Part C), A private health insurance alternative to traditional Medicare that covers Parts A and B and usually Part D, enrolling over half of all Medicare beneficiaries as of 2024.
Explore Hospital Data
About This Definition
This definition is part of the HospitalCostData Hospital Pricing Glossary, 47 terms explaining hospital costs, quality ratings, and healthcare billing. Written for patients, journalists, researchers, and healthcare professionals.