What does "out-of-pocket maximum" mean for a policyholder?

The "out-of-pocket maximum" refers to the maximum amount that a policyholder is required to pay for covered healthcare services within a specific policy year. Once this threshold is reached, the insurance company will cover 100% of the costs for any additional services that fall within the coverage of the plan for the remainder of that year. This limit provides important financial protection for policyholders by capping their total spending and ensuring that unexpected or high medical expenses do not result in significant financial strain. It serves as a safeguard to help people manage healthcare costs and can provide peace of mind knowing that their financial liability has a ceiling.

The other options describe different aspects of health insurance but do not correctly define the out-of-pocket maximum. For instance, the highest premium someone pays refers to the regular payment made to maintain coverage, not the total spending on care. Similarly, the total amount billed for a service implies charges before any insurance adjustments or cost-sharing, while a limit on the number of services covered under a plan pertains more to plan restrictions rather than the financial maximum a consumer could be required to pay.