These are two numbers tell you something about how much you could end up spending out of pocket during the year. But what’s the difference?
Your deductible is how much you must pay out of your own pocket before your health plan starts to pay any benefits. Let’s say your deductible is $2000 and your out-of-pocket max is $5000. At the start of the year, you should plan on spending at least $2000 on your own medical costs. Of course if you don’t get any health care, or you only get preventive care, you won’t have to pay anything.
Your annual out-of-pocket max (OOP max) is a limit on how much you’ll have to pay towards any health care during the year. In this example, you can relax knowing that you won’t be responsible for paying more than $5,000 towards your medical care, no matter how much care you actually get. The OOP max includes co-pays and co-insurance but not premiums. And sometimes, but not always, it includes the deductible.
Think of your OOP max as a protection (your friend!) and your deductible as a liability (not so much your friend).
Let’s take a deeper look at how the deductible and OOP max are related by pretending you suddenly had some major medical services.
If your deductible does count towards your OOP max, good for you! This means you’ll “get credit” for everything you pay from the beginning of the year. After meeting your deductible, you’d only have $3,000 more to pay before everything is covered. Making the actual amount you pay throughout the year $5,000 .
Now, say your deductible didn’t count towards your OOP. After you paid your $2,000 portion, you would still be responsible for an additional $5,000. That makes a total of $8,000 you’d actually owe in the end.
So while it’s important to know how much your deductible and OOP max are, you also need to know how they relate to one another. It could mean a difference of thousands of dollars in your pocket!