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Out of Pocket

Last updated: April 12, 2018

What Does Out of Pocket Mean?

Out of pocket, in the context of insurance, refers to health care expenses the policyholder has to pay with their own financial resources. Often, health insurance policies include an out-of-pocket limit or maximum over the course of a year. In this case, after having paid that amount out of their own pocket, a policyholder can expect the insurance company to cover the entirety of future insured health services fees.

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Insuranceopedia Explains Out of Pocket

Examples of out-of-pocket expenses would include a $500 deductible, a co-pay of $20 for certain health services, and 20% coinsurance payments after meeting the deductible payment on subsequent health services. Once all qualifying expenses add up to the out-of-pocket limit, the insurance company then covers all insured health benefits for the remainder of the year.

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