This lesson shows you exactly what Original Medicare leaves uncovered — in real dollar amounts. Understanding these gaps is what motivates most people to get supplemental coverage.
The 20% Problem: No Out-of-Pocket Maximum
After your Part B deductible ($283), Medicare pays 80% of approved charges. You pay the remaining 20%. The critical issue: there is NO annual out-of-pocket maximum on Original Medicare.
Real-World Examples:
- A hip replacement costs $40,000 → You owe $8,000
- A heart bypass costs $150,000 → You owe $30,000
- Cancer treatment costs $300,000 → You owe $60,000
- Extended hospital + rehab costs $500,000 → You owe $100,000
This is the primary reason Medicare Supplement plans exist — to cover that 20% so you do not face unlimited financial exposure.
Part A Hospital Gaps
| Hospital Stay | Your Cost |
|---|---|
| Days 1-60 | $1,736 (one-time per benefit period) |
| Days 61-90 | $434/day |
| Days 91-150 (lifetime reserve) | $868/day |
| Beyond 150 days | 100% — you pay everything |
Skilled nursing: $0 for days 1-20, then $209.50/day for days 21-100, then 100% after day 100.
Services Medicare Does NOT Cover At All
The Financial Risk: With vs. Without Medigap
| Scenario | Without Medigap | With Plan G |
|---|---|---|
| 5-day hospital stay | $1,736 (Part A deductible) | $0 |
| Outpatient surgery ($15,000) | $3,000 (20% coinsurance) | $0 |
| Cancer treatment ($200,000) | $40,000+ (20% coinsurance) | $0 |
| 90-day hospital stay | $1,736 + $12,570 (days 61-90) | $0 |
| Healthy year (routine care) | $283 deductible + copays | $283 Part B deductible only |
Your Coverage Gap Calculator
Enter your estimated annual medical costs to see what you would pay out-of-pocket under three scenarios.
I have been in this business for over 20 years, and the most common regret I hear is: "I did not think I needed a Supplement because I felt healthy." The problem is, you do not buy insurance for when you are healthy. You buy it for the unexpected. A single hospital stay or cancer diagnosis without supplemental coverage can wipe out years of retirement savings. Plan G costs roughly $150-200/month in most states. That is your insurance against a $50,000 or $100,000 medical bill.
Knowledge Check
Answer all questions to unlock the next lesson
Q1.With Original Medicare only (no supplement), what is the maximum you could owe for outpatient services in a year?
Q2.John has Original Medicare only and needs a knee replacement that costs $50,000. After his Part B deductible, approximately how much will he owe?
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