Out-of-pocket expenses
Out-of-pocket expenses are direct outlays of cash which may or may not be later reimbursed
Reimbursement is the act of compensating someone for an expense . Often, a person is reimbursed for out-of-pocket expenses when the person incurs those expenses through employment or in an account of carrying out the duties for another party or member....


In operating a vehicle, gasoline
Gasoline , or petrol , is a toxic, translucent, petroleum-derived liquid that is primarily used as a fuel in internal combustion engines. It consists mostly of organic compounds obtained by the fractional distillation of petroleum, enhanced with a variety of additives. Some gasolines also contain...

, parking fees and tolls are considered out-of-pocket expenses for the trip. Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...

, oil
An oil is any substance that is liquid at ambient temperatures and does not mix with water but may mix with other oils and organic solvents. This general definition includes vegetable oils, volatile essential oils, petrochemical oils, and synthetic oils....

 changes, and interest
Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money, or money earned by deposited funds....

 are not, because the outlay of cash covers expenses accrued over a longer period of time.

The services rendered and other in-kind expenses are not considered out-of-pocket expenses, nor are depreciation
Depreciation refers to two very different but related concepts:# the decrease in value of assets , and# the allocation of the cost of assets to periods in which the assets are used ....

 of capital goods or depletion
Depletion may refer to:*Depletion , an accounting concept*Depletion region, a concept of semiconductor physics*Depletion width, a concept of semiconductor physics*Grain boundary depletion, a mechanism of corrosion...


Organizations often reimburse out-of-pocket expenses incurred on their behalf, especially expenses incurred by employees on their employers' behalf. In the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

, out-of-pocket expenses for such things as charity, medical bills, and education may be deductions on federal
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

 income taxes, according to IRS
Internal Revenue Service
The Internal Revenue Service is the revenue service of the United States federal government. The agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue...


To be out of pocket is to have expended personal resources, often unexpectedly or unfairly, at the end of some enterprise.

Health financing

In the health care financing sector, this represents the share of the expenses that the insured party must pay directly to the health care provider, without a third-party (insurer, or state).

Out-of-pocket costs are high especially when it comes to prescription drugs in the United States. Before investing in a health care plan, it is very useful to examine the out-of-pocket prescription costs seeing at they may be very low or very high. High out-of-pocket costs may correlate with lowered prescription adherence. Medicare Part D
Medicare Part D
Medicare Part D is a federal program to subsidize the costs of prescription drugs for Medicare beneficiaries in the United States. It was enacted as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 and went into effect on January 1, 2006.- Eligibility and...

is a Federal program aimed at lowering prescription drug costs for Medicare beneficiaries. However, after the first year of Medicare Part D, out-pocket drug costs were down but there was not a noticeable reduction in emergency room visits, hospitilization, or health utility score. Perhaps some diseases will be more sensitive to Medicare Part D.

Some ways to improve physician knowledge of drug costs were thought to be increased physician-patient communication or higher use of information technology. Physicians with high rates of IT use did not have significantly higher knowledge or drug costs. Health IT design should be improved to make it easier for physicians to access cost information at the point of care.
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