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Medicare Maximum Out-of-Pocket


There isn’t a maximum out-of-pocket on Medicare. Because of this, there is no limit to the amount you can pay in medical bills. You can contribute 20% of any number of costs after meeting the deductible. Don’t worry, though; we have a few solutions to help you. Below we discuss Medicare plans that have a maximum limit and some that don’t. Then, we’ll cover some common questions people have about the maximum out-of-pocket.

What is the Medicare Maximum Out-of-Pocket?

Medicare doesn’t have a limit on the amount you can spend on healthcare. But, they do cover a portion of most medical bills. Yes, there is some help, but 20% of $100,000+ surgery or accident could be bank-breaking.

But, there are options to supplement your Medicare. Some options have a maximum limit. Yet, some options don’t. The best option will be the one that saves you the most money.

What’s the Medicare Advantage Maximum Out-of-Pocket?

Part C, Medicare Advantage plans offer a maximum out-of-pocket because they want the policy to be more appealing than Medicare. But, an Advantage policy is full of financial risks.

For example, most plans have a narrow network of doctors. And, if the doctor doesn’t accept the policy, you don’t have coverage.

Any expense you incur that doesn’t have coverage won’t apply to your maximum out-of-pocket. Further, that service will be 100% your bill. Some choose PPO plans to have some coverage outside the plan. Unfortunately, many PPO plans charge more for out-of-network doctors than Medicare would.

Also, the limit amount is, on average, over $5,000 for an HMO and over $8,000 for a PPO each year. For most, the annual cost of Medigap is far less than the Medicare Advantage limits.

I’m sure you know better than to be fooled by a limit of over $5,000 in medical costs. That is a lot of money.

Does Medicare Have an Out-of-Pocket Spending Cap?

No, with Medicare you can pay any amount out-of-pocket on medical bills. So, those with chronic health conditions can expect to pay endlessly on coinsurances with Medicare. There is no Part A or Part B maximum out-of-pocket.

Do Medigap Plans have an Out-of-Pocket Maximum?

Medigap plans don’t have a maximum out-of-pocket because they don’t need one. The coverage is so good you’ll never spend $5,000 a year on medical bills.

Sure, the premium is a little higher, but the benefits are more significant. If high medical bills are your concern, consider choosing Medigap.

FAQs

What is an annual out-of-pocket maximum?
The annual out-of-pocket maximum is the limit you pay on covered services for the year.
What counts towards the maximum out-of-pocket limit?
Costs that count toward the Medicare Advantage maximum out-of-pocket include deductibles, copayments, and coinsurances. The monthly premium doesn’t count towards your limit.
What happens after the out-of-pocket limit is met?
In most cases, once you meet the out-of-pocket max, insurance will pay 100% of covered medical costs until the end of the year.

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Lindsay Malzone

Lindsay Malzone is the Medicare expert for MedicareFAQ. She has been working in the Medicare industry since 2017. She is featured in many publications as well as writes regularly for other expert columns regarding Medicare. You can also find her over on our Medicare Channel on YouTube as well as contributing to our Medicare Community on Facebook.

4 thoughts on “Medicare Maximum Out-of-Pocket

  1. My understanding is that the insured person has to pay ALL costs beyond a certain no. of days for hospital stay. Same for skilled nursing care. Is this correct?

  2. This is not good information. You make no mention of the fact that most Advantage plans have a $0 premium, whereas the average premium for a Medigap is $200 or more a month, PLUS your Part B premium, PLUS you have to purchase separate drug coverage, PLUS they don’t include Dental, Vision and Hearing. Many Advantage plans have a max out of pocket of less than $3,000, and as low as $1,200. And yes, they don’t cover out-of-network, but why would the average person need that? Just visit your doctors in-network…. And if your Primary Care physician tells the plan that it’s medically necessary to see a particular out-of-network doctor, the plan can make an exception. This article seems heavily biased towards Medigap plans without considering that Advantage plans can be more appropriate for many people.

    1. Hi Benjamin! I appreciate your feedback. Perhaps one of our other articles on Medicare Advantage plans will help you understand why they are not a good fit for most Medicare beneficiaries. To address your points above… the premium for Medigap plans depends on the letter plan you choose. They average anywhere between $50-$300 a month. You have to pay the premium for Part B to enroll in either a Medigap plan or a Medicare Advantage plan regardless. There is no out-of-pocket maximum with Medigap plans because you don’t need one. You will spend more out of pocket (copays, coinsurance, deductibles) with a Medicare Advantage plan as you use the benefits than you would in monthly premiums for a Medigap plan. Especially if you get diagnosed with a serious illness or condition. Many people travel when they are retired, Medicare Advantage plans don’t travel with you, Medigap plans do. They will even provide you with emergency coverage outside the U.S. The biggest complaint we hear with Medicare Advantage is regarding the dental benefits, not only are the benefits very limited, most dentists do not accept Medicare Advantage plans. Yes, Medicare Advantage plans are appropriate for some individuals, but not most. There are a lot of other factors to consider outside of networks and MOOP limits when it comes to deciding between Medicare Advantage and Medigap.

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