Medicare Advantage
Medicare Advantage Out-of-Pocket Maximum: What Counts Toward It and What Does Not
Each Medicare Advantage plan sets a yearly limit. The limit caps what you pay for covered Part A and Part B care. See which costs count toward that limit. See which costs never do.
Key takeaways
- The limit counts what you pay for covered care. It counts Part A and Part B services. It counts copays and coinsurance. It counts a medical deductible too, if your plan has one.
- Say your counted costs reach the limit. Then you pay nothing for covered care. You pay nothing for Part A and Part B services. That holds for the rest of the year.
- Your premiums never count toward the limit. That means your plan premium. It means your Part B premium too.
- Drug costs under Part D never count here. They never count toward this limit. Part D rules set a separate yearly cap for drugs.
- Care outside that group does not count. If care is not a covered Part A or Part B service, it does not count.
- You can find your plan's limit in two places. Look in its Evidence of Coverage. Look in its Summary of Benefits. Original Medicare has no yearly limit like this one.
Each Medicare Advantage plan sets a yearly limit. The limit caps what you pay out of pocket. It caps pay for covered Part A and Part B services. Hit that limit and you pay nothing more. You pay nothing for Part A and Part B services the plan covers. That lasts for the rest of the year.
Your plan sets the limit. So this guide does not state one dollar amount for it. Plans pick limits that differ from plan to plan. Your plan's limit is in your plan's own papers. This guide shows a split. Which costs count toward the limit? Which costs never count at all? Most surprise bills come from that split. Our guide on switching, dropping, or keeping a plan before December 7 covers the window when you can change plans.
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Costs that count toward the limit
The limit tracks your cost sharing. It tracks shares for covered hospital care. It tracks shares for medical care too. A copay for a doctor visit counts. Coinsurance for an outpatient service counts. A copay for a hospital stay counts. Does your plan charge a medical deductible? What you pay toward it counts too.
Think of it as a running total. It adds up the shares you pay for covered care. Each bill for a covered Part A or Part B service adds to it. The total grows bill by bill. Say the total hits the limit your plan set. Then your cost sharing stops. It stops for the rest of the year.
Some plans cover care outside their network. Those plans may set a second limit. One limit can cover in-network care on its own. A higher combined limit can add both kinds of care. It adds in-network and out-of-network care. Your plan papers state which limits your plan has.
Costs that do not count
Premiums do not count at all. A premium is the cost of holding the plan. It is not a share of a service. You keep paying premiums all year. You pay them in each month. You pay even in a month when you have hit the limit.
Drug costs do not count toward this limit. Does your plan include drug coverage? Then Part D tracks your drug spending. Part D has its own yearly cap. The cap is on what you pay for covered drugs. Cash you spend at the pharmacy does not help here. It does not move you closer to the medical limit. And medical spending does not help with the drug cap. It does not move you closer to that cap. The two totals run side by side. They never mix.
Costs for care the plan does not cover do not count. Say you pay full price for a service. Say the service is not a covered Part A or Part B service. That payment sits outside the limit. Many plans add extra benefits too. Routine dental care is one case. Eye care is one too. Those are not Part A or Part B services. Cost shares for them do not build toward the limit.
What happens when you reach the limit
Say your counted costs reach the limit. Then you pay nothing for covered care. You pay nothing for Part A and Part B services. That lasts for the rest of the year. The plan pays the full cost of that covered care. This is the main protection the limit gives you. Say you have a long hospital stay one year. Say you have a lot of treatment. Your medical cost sharing still has a stop point.
The stop point covers cost sharing only. You still pay your premiums. You still pay drug costs under the Part D rules. The limit starts over on January 1 of the next year. It starts over in the plan you hold for that year.
How this differs from Original Medicare
Original Medicare has no yearly limit. It sets no cap on what you pay out of pocket. Under Original Medicare, you pay a share for Part B services. You usually pay 20% of the Medicare-approved amount. You pay that share after the deductible (Ledger A16). And that 20% share has no cap. A long illness can mean a long run of bills. There is no stop point. There is one way out. You may have other cover. A Medigap policy is one case. Medicaid or retiree cover from a past job can help too.
So the two systems trade places. Original Medicare lets you use any provider who takes Medicare. But it sets no stop point on your shares. A Medicare Advantage plan works the other way. It limits your choice of providers. Its network rules set that limit. But it sets a firm stop point each year. Our Medicare Advantage section holds more guides. They show how these plans work.
Who pays for what
Our guide on Medicare Advantage in-home support benefits covers an extra benefit. Many plans add extra benefits like it. The guide shows why those benefits sit apart. They sit apart from basic Part A and Part B cover.
- Medicare pays the Medicare Advantage plan a set sum each month. The sum is for your care. Medicare itself does not pay your copays.
- The Medicare Advantage plan pays for your covered care. It pays under its rules. Say you reach the plan's yearly limit. Then the plan pays the full cost of covered care. It pays for Part A and Part B services. It pays for the rest of the year.
- Medicaid can help some members. It can help with premiums and cost shares. Do you have both Medicare and Medicaid? You may pay less. Your state program sets how much less.
- Private pay: you pay your premiums. You pay your copays and coinsurance up to the limit. You pay drug costs under Part D rules. You pay full cost for care your plan does not cover.
Sample situation
Doris is 78 and has a Medicare Advantage plan. Her plan book prints her yearly limit, and she writes it on the first page of a small notebook. Each time she pays a copay for a covered visit or a share of a hospital bill, she writes the amount in the notebook and adds up the total.
By late October, her added-up copays and coinsurance reach the limit printed in her plan book. In November she has two covered follow-up visits. She pays nothing for them, because she has reached her limit and both visits are covered Part A and Part B services. She still pays her plan premium in November, and she still pays for her drugs under her plan's drug rules, because premiums and drug costs never counted toward the limit in the first place.
Where to find your plan's limit
- Look in your Evidence of Coverage. Find the part that lists what you pay. It lists what you pay for medical care.
- Check the Summary of Benefits. Your plan sends it each fall. The limit is one of the first cost lines.
- Use Medicare.gov/plan-compare. Each plan listing shows the yearly limit for that plan.
- Call the plan. Ask for the limit for in-network care. Ask if a second combined limit applies. It may apply if you use out-of-network care.