The out-of-pocket maximum is most a person will pay before their health insurance plan covers 100% of remaining medical expenses in a plan year or calendar year. To satisfy the out-of-pocket maximum, most health plans require a person to pay their annual deducible, plus any remaining coinsurance.
Example: John has a health plan with a $3,000 annual deductible, and 80% coverage after the deductible. The max out-of-pocket on his plan is $4,000. If John has a surgery, he can expect to pay his $3,000 deductible. Then his health plan starts paying 80% of his medical expenses. So John is still paying 20% of the medical bills (called coinsurance). Once John’s 20% in coinsurance expense adds up to $1,000, he has met the out-of-pocket max, and all medical expenses are then covered at 100% by the insurance company for the remainder of the calendar year.