What do out-of-pocket expenses mean? Definition and examples
Out-of-pocket expenses are costs you pay yourself that nobody reimburses. Here is what the term means for health care and for work, and how to plan for them.
Checked October 22, 2026
Out-of-pocket expenses are costs you pay yourself that are not reimbursed by insurance or anyone else.
What out-of-pocket means
The CFPB's glossary defines an out-of-pocket cost as an expense or loss that is not reimbursed by insurance. HealthCare.gov uses the same idea for medical care: your expenses for medical care that are not reimbursed by insurance.
The words come from money coming out of your own pocket. If someone pays you back, it stops being one.
Out-of-pocket costs in health care
HealthCare.gov says they include deductibles, coinsurance and copayments for covered services, and also costs for services your insurance does not cover. Its glossary page does not say whether your monthly premium counts, so check your plan's own paperwork for how it treats premiums.
Outside of health care, the phrase is used for any cost you front yourself. Pay for a work trip on your own card and wait for the company to pay you back and that is out of pocket until you are reimbursed.
Planning for them as a couple
Medical costs are the typical out-of-pocket surprise. Since they tend to come in lumps, many couples treat them as a periodic expense and set money aside for them. If you share a plan, ask which of you pays the first dollars toward the deductible, since that is where they land.
A medical bill and what you pay (example plan)
- Service billed: $2,000
- Deductible still to meet: $1,500, which you pay first
- Left after the deductible: $2,000 - $1,500 = $500
- Coinsurance of 20% on that $500: $500 x 0.20 = $100
- Your out-of-pocket cost: $1,500 + $100 = $1,600
- The plan pays the other $400
More words like this in money words, in plain English.
Questions people ask
What does out-of-pocket mean?
An expense you pay yourself that insurance or someone else does not reimburse.
What are out-of-pocket costs for health insurance?
Deductibles, coinsurance and copayments for covered services, plus the cost of services your plan does not cover, according to HealthCare.gov.
Do premiums count as out-of-pocket costs?
HealthCare.gov's glossary does not say. Check your plan's own materials.
Is an out-of-pocket cost reimbursed?
By definition, no. If insurance or someone else pays you back, the cost is no longer out of pocket.
Sources
2 sources · read October 22, 2026
Every number on this page comes from consumerfinance.gov and healthcare.gov. If a source has changed since, the source is right.
Wonderful gives general information. It isn't a financial or tax advisor.