Definitions
Health Insurance Terms
Out of Pocket Expense

Out of Pocket Expense

Definition:

The amount the patient must pay themselves and not paid for by the insurance plan

Application:

Using an 80/20 example, whereby the 20% is the patient's coinsurance and 80% is the insurance payment. The 20% is also termed the patient's out of pocket expense which is the amount not paid for, but it is a covered expense. Plans have a limitation to the amount a patient is responsible for out of their own pocket on a yearly basis. After $1,000 or more paid by the patient, the health plan will then cover services at 100% of the allowable charge.

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