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Medicare Advantage Plans Maximum out of Pocket Costs


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If you’re considering your Medicare options, out-of-pocket costs probably factor into your decision. It may surprise you that there is no Medicare out of pocket maximum under Medicare Part A and Part B. However all Medicare Advantage plans have out-of-pocket maximums. Here’s what you should know about your out-of-pocket costs with Medicare Advantage plans.

Does Medicare have a maximum out of pocket limit?

There is no limit to your potential medical bills under Original Medicare. Under current rules, there is no Medicare out of pocket maximum; if you have a chronic health condition or an unexpected health crisis, you could pay thousands in medical costs.

Under Original Medicare, you are responsible for your annual Part B deductible, a Part A deductible for each benefit period (and you can have several in any particular year), and your coinsurance and copayment amounts.

You can get a Medicare Supplement plan to help cover your Medicare out of pocket costs.

Is there a Medicare out of pocket maximum for Medicare Advantage Plans?

Medicare Advantage plans work differently than Original Medicare. Medicare Advantage plans are actually sold by private insurance companies approved by Medicare, and after they meet the Medicare minimum requirements for coverage, these companies are free to set their own premiums, benefits, and cost-sharing structures.

Most Medicare Advantage plans use a network of preferred providers, which means your out-of-pocket costs are lower when you use providers who participate with your plan. Some plans allow you to get care from any provider outside your network who accepts your plan. These services are considered out-of-network, and you may pay significantly more out-of-pocket if you go outside your plan’s network.

What is the out of pocket maximum for Medicare Advantage Plans?

The Medicare out of pocket maximum for Medicare Advantage plans in 2018 is $6,700 for in-network expenses and $10,000 for combined in-network and out-of-network expenses, depending on the type of Medicare Advantage plan you buy. What this means is that once you reach the out-of-pocket limit, your plan pays 100% of your health care expenses for covered medical services for the remainder of the year. The average out-of-pocket limit for Medicare Advantage plans decreased from $5,815 to $5,164 in 2019, according to eHealth research.

Medicare Advantage Out of Pocket Maximum

It’s important to keep in mind, however, that just because Medicare imposes a maximum limit, Medicare Advantage plans are free to set their own voluntary out-of-pocket limits, as long as they are below the maximum.

What’s included in the Medicare out of pocket maximum for Medicare Advantage plans?

Medicare rules allow Medicare Advantage plans to credit the following costs toward your out-of-pocket maximum:

  • Copayments or coinsurance amounts for doctor visits, emergency room visits, hospital stays, and covered outpatient services
  • Copayments or coinsurance for durable medical equipment and prosthetics
  • Copayments or coinsurance for laboratory and diagnostic imaging services
  • Copayments or coinsurance for skilled nursing facility stays
  • Copayments or coinsurance for home health care

Out of pocket costs for most services normally covered by Medicare count toward your out-of-pocket maximum. In addition, your plan may also choose to credit costs not typically covered by Original Medicare but included in your Medicare Advantage plan toward your out-of-pocket maximum. These services might include preventive and restorative dental care, routine vision care and prescription eyewear, and hearing exams and devices, as well as any covered care you get while traveling outside the United States.

What else should I know about Medicare Advantage plans and maximum out-of-pocket limits?

Costs associated with your Part D Prescription Drug Plan don’t count toward your Medicare out of pocket maximum for Medicare Advantage plans. Part D plans have their own out-of-pocket limits before catastrophic coverage kicks in.

If your Medicare Advantage plan has an annual deductible, this also counts toward your maximum out-of-pocket limit. Monthly premiums, however, do not.

Be sure to consider both premiums and out-of-pocket maximums when you’re comparing Medicare Advantage plans. A plan with a higher monthly premium and copayments but a low out-of-pocket maximum may actually save you money over the course of the plan year compared to one with a lower premium and copayments.

Do you want to find a Medicare Advantage plan that will limit your Medicare out of pocket costs? Feel free to use enter your zip code on this page to browse and compare Medicare plan options in your location. We can help you find Medicare plan options that address your Medicare needs.

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