Confused about Medicare Advantage maximum out-of-pocket limits? Read on to find out more about these plans.
Medicare Advantage Maximum Out-of-Pocket Limits: A Safety Net
Medicare Advantage are private health insurance plans that put a limit on how much you’ll need to pay each calendar year out of your own pocket for covered medical services. This is also known as a maximum out-of-pocket limit.
Like Original Medicare (Parts A&B that you get from the government), Medicare Advantage plans make you pay part of the cost for covered medical services. Your share of the bill typically ranges from 20% to 40% or more, depending on the care you receive.
But, unlike Original Medicare, Medicare Advantage plans are required to place a limit on the amount of money you have to pay for covered medical services. Once you reach your plan’s maximum out-of-pocket, your insurance plan will pay 100% of additional covered charges incurred in the remaining calendar year.
Watch this video below on Medicare Advantage plan’s maximum out-of-pocket limit.
Generally, the lower the out-of-pocket limit, the less you will potentially pay on covered health-care costs during a year.
What costs are included in the out-of-pocket maximum?
Medicare Advantage out-of-pocket costs that count towards this limit include:
- Primary care or specialist copayments
- Emergency room visit copayments
- Your hospital per stay or per day deductible, or your per day copayment for the first five or seven days of your hospitals stay
- Coinsurance for services such as x-ray and radiology services
- Copayments for outpatient rehabilitation services
- Coinsurance for a prosthetic device or durable medical equipment
- Outpatient mental health or substance abuse visit copayments
- Outpatient hospital visit or ambulatory surgical center visit copayments
The above list is a sample of out-of-pocket expenses that may be incurred under a Medicare Advantage plan. Your insurance plans’ Summary of Benefits and Evidence of Coverage will provide detailed information about the actual deductibles, copayments, coinsurance, and other out-of-pocket costs that may apply to services covered under your Medicare Advantage plan.
It’s important to note that any monthly premium you pay for Medicare Advantage coverage does not count towards your plans’ out-of-pocket maximum. Additionally, any costs paid for outpatient prescription drug coverage (Part D) do not apply to your out-of-pocket maximum. The Medicare Advantage out-of-pocket maximum only includes the combined cost for copayments, coinsurance, and other costs paid for medical services.
Medicare Advantage plans with managed care network may have different out-of-pocket maximums based on whether your services are provided in-network or out-of-network. This is especially true for Preferred Provider Networks (PPO) and Health Maintenance Organization – Point of Service Networks (HMO-POS) plans.
Why are out-of-pocket limits important?
When shopping for a Medicare Advantage plan, many people focus on plan premiums and how much they can expect to pay per month. However, some may fail to look at the premium in relation to how much they could be responsible for if they got sick or were injured.
Even if a plan has a higher monthly premium, it could save you money if its maximum out-of-pocket limitis low. While you need to weigh premium costs and other plan features before deciding on a Medicare Advantage plan, don’t forget to factor in the importance of low maximum out-of-pocket limits.
Key points about Medicare Advantage maximum out-pocket limits
- When comparing Medicare Advantage plans, weigh the cost of premium versus out-of-pocket maximums as part of your analysis.
- Review your Summary of Benefits to see what deductibles, copayments, and coinsurance costs you may have to pay for different services.
- Your monthly premium does not count in determining your out-of-pocket covered expense.
- The out-of-pocket limit only applies to covered medical services. If you use services not covered under your Medicare Advantage plan, they will be excluded from the out-of-pocket maximum calculation
- Medicare Part D outpatient prescription drug plan deductibles and copayments have their own out-of-pocket limit and are not included in the health plans’ medical out-of -pocket maximum.
- Some Medicare Advantage plans provider networks may have lower out-of-pocket limits for in-network care.
Medicare has neither reviewed nor endorsed this information.
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