What is the maximum out-of-pocket expense with Medicare?

The maximum out-of-pocket expense with Medicare will vary by plan type. There are no out-of-pocket maximums with original Medicare or Medicare Part D. However, Medicare Advantage does have set limits for out-of-pocket spending. Learn more about the out-of-pocket maximums for each Medicare plan type below.

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D. Gilson is a writer and author of essays, poetry, and scholarship that explore the relationship between popular culture, literature, sexuality, and memoir. His latest book is Jesus Freak, with Will Stockton, part of Bloomsbury’s 33 1/3 Series. His other books include I Will Say This Exactly One Time and Crush. His first chapbook, Catch & Release, won the 2012 Robin Becker Prize from Seve...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: Dec 11, 2020

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The Highlights

  • The maximum out-of-pocket expense for Medicare will vary by plan type.
  • Original Medicare and Medicare Part D do not have out-of-pocket maximums.
  • Medicare Advantage has varying out-of-pocket maximums.

Medicare out-of-pocket expenses are what you will have to pay out of your own money and are not covered by Medicare health insurance.

What is the maximum out-of-pocket expense with Medicare? Some Medicare plans have a maximum amount of out-of-pocket expenses that you are required to pay, while others do not.

Below, we’ll review the out-of-pockets maximums, along with other costs, by Medicare plan type.

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What is the maximum out-of-pocket expense with Medicare?

Let’s take a closer look at the maximum out-of-pocket expenses with Medicare.

Original Medicare Out-of-Pocket Maximums

Original Medicare consists of both Medicare Part A and Medicare Part B. It is a public medical insurance program that provides coverage for individuals over the age of 65 or who have specific chronic diseases and disorders.

The plan does cover a large portion of medical expenses, but there are no out-of-pocket maximums. This means that the more you need for medical care, the more you’re going to be paying yourself. This is due to the fact that Medicare wants to promote responsible use of medical services.

Below are some common Medicare costs.

Medicare Part A Costs

Medicare Part A is used to cover hospitalizations. While you most likely won’t pay any premiums, you will have to pay a deductible of $1,484 (in 2021) before your Medicare policy starts to cover your daily costs.

After 60 days of inpatient care, you’ll have to pay $371 per day. After 90 days, this increases to $742 per day. If you use all 60 of your lifetime reserve days, you’ll have to pay all expenses.

Medicare Part B Costs

Medicare Part B is used to cover outpatient care. Your premiums are determined by your income, but they will start at $148.50 per month (in 2021). The deductible is $203 per year.

Understanding your health care deductible is incredibly important. You will need to pay 20 percent of your Medicare costs. However, some services are fully covered.

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Medicare Advantage Out-of-Pocket Maximums

Medicare Advantage, or Medicare Part C, is a private plan that replaces original Medicare. It may also include Medicare Part D.

Some Medicare Advantage costs can be hard to determine, since they’ll vary, but these plans do have a maximum out-of-pocket (MOOP) expense limit, and some plans may set their limits even lower than what is required.

In 2021, the MOOP for Medicare Advantage is $7,550. Out-of-pocket expenses are split into two levels: in-network and out-of-network. These will include deductibles, copayments, and coinsurance, but will probably not include premiums or Medicare Part D costs.

Medicare Part D Out-of-Pocket Maximums

Medicare Part D is a private insurance addition that covers prescription drugs. There is no maximum out-of-pocket expense with Medicare Part D. However, once you pay $6,550 in out-of-pocket expenses, you will qualify for catastrophic coverage, you will have a set copayment or coinsurance, which ranges from $3.70 to $9.20 for medications.

Out-of-pocket expenses for Medicare Part D may include your premium (based on income), a deductible of $445 (in 2021), copayments, and coinsurance.

Medigap Out-of-Pocket Maximums

There are ten different Medigap plans available to purchase. They are used to cover the out-of-pocket expenses for Medicare. Only two have out-of-pocket maximums — Plan K and Plan L. In 2021, the maximum for Plan K is $6,220 and Plan L is $3,110.

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Conclusion: Maximum Out-of-Pocket Expense with Medicare

The maximum out-of-pocket expense with Medicare will vary by plan. Some plans do not have out-of-pocket maximums.

If you need help finding health insurance, use our free tool below to get health insurance quotes from companies in your area.

References:

    1. https://www.medicare.gov/your-medicare-costs/medicare-costs-at-a-glance

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