What does the term "out-of-pocket costs" refer to in healthcare?

The term "out-of-pocket costs" in healthcare specifically refers to expenses that a patient must pay directly that are not covered by their insurance plan. This includes costs such as copayments, deductibles, and any other costs the insurance does not reimburse. These payments are the financial responsibility of the patient, occurring in various situations, including visits to healthcare providers, medications, and laboratory tests where insurance coverage may fall short.

Understanding out-of-pocket costs is crucial for patients to manage their healthcare expenses effectively, as these costs represent the portion of healthcare that individuals are responsible for without any assistance from their insurance policies. Recognizing and planning for these expenses can help patients avoid unexpected financial burdens related to their healthcare needs.