A lot of people who take prescription drugs are confused about what the out of pocket maximum is for medication. The answer, unfortunately, is complicated. Prescription insurance plans can be much different than health coverage you receive through your employer. There is a way to understand the ultimate cost of prescription drugs; you just have to read the fine print.

When they say “out of pocket maximum” they are referring to the most a patient will have to pay out of their own pockets in a calendar year.

With standard health coverage, like a PPO, you have to pay a certain percentage for the services you receive. Once you have spent a fixed amount (say 2,000 dollars) you have met your responsibility and no longer have to pay for services for the rest of the year.

This is not the case with most prescription insurances. Patients pay fixed amounts when it comes to their drugs, but there are no out-of-pocket maximums. The pricing is fixed. A patient will pay a certain amount of money for their medication depending on what class that drug falls into. For example, a patient may pay $5 for a generic drug and $10 for a brand name drug and 10% of the drug cost for a non-formulary drug (a drug that is not preferred for use). But in most cases, a patient will have to pay those co-pays for an entire year, no matter what their out of pocket cost was. The best way to find out about maximums is to contact your prescription plan or search for online insurance quotes.

Insurance companies usually don’t write in a maximum because they offer patients a discount by choosing generic drugs. They figure if a patient is buying all generic drugs than the cost to them is greatly reduced, thus eliminating the need to set a maximum.

The only place where a maximum is widely known is with the government’s Medicare Part D drug program. A patient only pays a certain amount of money in a calendar year before the program puts them into “catastrophic coverage.” This means that a patient has paid their co-pays, paid an additional $2,000 once they reached their coverage gap, and still have medication costs. The government puts them into a catastrophic coverage and picks up the remaining cost for the calendar year.

As health care continues to grow and expand there will be changes to how prescription benefits are done with more choices for patients including new government plans and more accurate online insurance quotes. But at this time there seems to be no end in sight to the patient cost of prescription drugs.