Out Of Pocket

What Does Out Of Pocket Mean?

In the context of insurance, “out of pocket” refers to health care expenses that the policyholder must pay using their own financial resources. Many health insurance policies include an out-of-pocket limit or maximum for a given year. Once a policyholder reaches this limit, the insurance company typically covers all remaining insured health service costs for the rest of the year.

Insuranceopedia Explains Out Of Pocket

Examples of out-of-pocket expenses include a $500 deductible, a $20 co-pay for specific health services, and 20% coinsurance payments after meeting the deductible for additional health services. Once these expenses collectively reach the out-of-pocket limit, the insurance company covers all insured health benefits for the rest of the year.