An annual limit in health insurance is a maximum amount of money that the insurance company will pay for covered healthcare services in a given year. Once you reach the annual limit, you will generally be responsible for paying for any additional healthcare costs out of pocket.
Annual limits are often used to control the costs of insurance policies. By setting a maximum amount that the insurance company will pay each year, the insurer can limit its financial exposure and offer lower premiums to policyholders.
Annual limits can vary widely depending on the policy. Some policies may have no annual limit, while others may have a limit of a few thousand dollars or more. It is important to carefully review the terms of your policy to understand any annual limits that may apply.
In the United States, the Affordable Care Act (ACA) imposes limits on annual out-of-pocket costs, which include deductibles, copays, and other out-of-pocket expenses. The ACA limits annual out-of-pocket costs to a maximum of $8,550 for an individual plan and $17,100 for a family plan in 2021. These limits do not include premiums, which are separate from out-of-pocket costs.