Does Medicare have an out-of-pocket maximum?
Recently, my mom fell and broke both her
wrists. Between the trip to the ER, X-rays and follow-up visits, the
cost of her health care really added up. Thankfully, her Medicare plan
had a medical out-of-pocket maximum that limits the amount she has to
spend each year.
Once she hits her out-of-pocket maximum,
her plan covers all the costs for her medical care. She’s financially
protected, even if she has another unexpected or expensive health care
need. That’s why an out-of-pocket maximum is so important for people
with a Medicare plan, especially those living on a fixed income.
What is an out-of-pocket maximum?
This is the limit on how much you might
pay for medical care through copays and coinsurance in a year. Some
people never get enough health care to hit their out-of-pocket maximum.
Think of your out-of-pocket maximum like a
bucket. Every time you spend your own money on medical services or
care, it goes into the bucket. Once the bucket is full, you’ve hit your
out-of-pocket maximum. After that, your Medicare health plan will cover
the cost of any Medicare-covered doctor visits or medical services you
need.
For example: William needs a surgery that
costs $10,000. His plan’s medical out-of-pocket maximum is $4,000. He’s
already spent $3,000 on medical care. Even if William’s coinsurance for
surgeries is 20 percent (meaning he’d normally have to pay $2,000 for
the $10,000 surgery), he would only have to pay $1,000 in this case.
That’s because his out-of-pocket maximum kicks in after he pays $4,000
(and that $3,000 he spent earlier in the year counts toward this
number).
And if he needs additional care through
the end of his plan year, his health plan will generally cover the cost
for that as well. William won’t need to pay any more copays or
coinsurance.
Here are some things to keep in mind:
- Original Medicare doesn’t have an out-of-pocket maximum. Medicare Advantage plans do. And the out-of-pocket maximum is different between plans. If you’re shopping for a Medicare Advantage plan, be sure you choose one with an out-of-pocket maximum that fits your budget.
- Your out-of-pocket max doesn’t include the cost of your meds. Money you spend on most prescriptions won’t count toward your out-of-pocket maximum.
- Your out-of-pocket max doesn’t include the cost of your monthly premium or Part B premium.
- Some plans may have separate in-network maximums and out-of-network maximums. Out-of-network maximums are usually higher. With some Medicare plans, your out-of-network costs count toward your in-network maximum. That means you’re making progress toward hitting your in-network out-of-pocket max, even if you go to an out-of-network health care provider. Check with your member services team to see if this is the case with your plan.
At the end of the day, your plan’s
out-of-pocket maximum is meant to bring you peace of mind. So even if
something unexpected happens – like my mom’s accident – you’ll know the
worst-case amount you’ll have to pay each year for your health care
needs. And that makes it a lot easier to plan your budget.
This information, in turn, can help you find the best healthcare exchange pa for your
money and the coverage that best fits your lifestyle and your needs.
This information, in turn, can help you find the best healthcare exchange pa for your
money and the coverage that best fits your lifestyle and your needs.
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