The Difference Between Deductible and Maximum Out-of-Pocket

96% of Americans find insurance confusing, which affects understanding and preparing for out-of-pocket costs. A common misunderstanding is the difference between deductible and maximum out-of-pocket.

So, what’s the difference?

• Your deductible is the amount you’ll pay for treatment before your insurance helps cover the costs. In general, your first few treatments of the year will go toward your deductible.

Pro Tip: Because dental insurance is focused on prevention, the majority of plans cover regular cleanings before you hit your deductible.

• A maximum out-of-pocket is the most you will have to pay for dental care during the year. If you hit your maximum for the year, your provider will pick up any costs accrued afterward.

Keep in mind: Not all plans have a maximum out-of-pocket, and it is different from your annual maximum, which is the maximum dollar amount that the insurer will pay toward treatment for that year.

How do deductibles and maximum out-of-pockets work together?

If you have a deductible, you will be responsible for all treatment costs until you have met that amount. Afterward, your provider will start covering a portion of the costs, and you will be responsible for the other portion. This is called coinsurance.

If your plan has a maximum out-of-pocket, it will factor in all out-of-pocket costs made during the year. This could, but doesn’t always, include your deductible, coinsurance, copayments and any prescription costs.

What should I know about my plan?

When considering your out-of-pocket expenses, make sure you understand the following:

• Your deductible.
• If your plan covers preventive treatments, like cleanings and X-rays, before the deductible is met.
• If your plan has a maximum out-of-pocket and what costs it includes.
• Who is eligible for the maximum out-of-pocket? Sometimes a  maximum out-of-pocket covers child dependents but not adults.
• If your plan has an annual maximum. 

You can login to your account or contact our customer service department to learn your plan specifics.