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Can you explain the out-of-pocket limit?

Medicare Advantage plans must limit how much their members pay out-of-pocket for covered Medicare expenses. The maximum out-of-pocket limit is $6,700 for in-network services and $10,000 for out-of-network services. Medicare set the maximum but some plans voluntarily establish lower limits. After reaching the limit, Medicare Advantage plans pay 100% of eligible expenses. 

Here are some facts to know.

  • This limit excludes monthly premiums and prescription medications. 
  • Health Maintenance Organization (HMO) plans have a limit on in-network care only. Preferred Provider Organization (PPO) plans have a limit for both in-network and $10,000 in- and out-of-network combined.  
  • Only Medicare-covered services count toward the out-of-pocket limit. 
  • Services not usually covered by Medicare, such as hearing, vision, and non-emergency transportation, are not counted in the limit.
  • Each plan determines its maximum out-of-pocket limit and the limit can change every year. 

Check the Medicare Advantage plan’s evidence of coverage for details on the out-of-pocket limit. 

FYI: It's true that Original Medicare Part A and Part B do not have a limit on how much a beneficiary can spend out-of-pocket. However, those who have a Medigap policy (Medicare supplement insurance) don't have to worry. Any policy sold in the country covers the 20% Part B coinsurance. Plus, optional benefits can protect a beneficiary from other costs, such as the hospital deductible and skilled nursing facility copayment for days 21-100.

Last updated: 08-27-2018