What Are My Annual Maximum Out-Of-Pocket (MOOP) Expenses On Medicare Advantage Plans?

One thing that may surprise you when exploring your Medicare options is that there are no limits to out-of-pocket costs under Medicare Part A and Part B (Original Medicare). This means that, without supplemental insurance, if you face a lot of healthcare needs or have multiple expensive services done in a year, you'll be responsible for paying all copayments or coinsurances related to those services.

If the prospect of unlimited out-of-pocket costs concerns you, there is another type of Medicare plan that might serve you better: Medicare Advantage plans (which is also sometimes called Medicare Part C). These plans operate differently than Original Medicare and have a cap on the amount of money you'll pay for healthcare in a calendar year called the maximum out-of-pocket limit (MOOP).

Understanding MOOP limits

Medicare Advantage plans are all-in-one Medicare plans that include coverage for Original Medicare, as well as potential benefits like prescription drug coverage, vision, hearing services and dental. These plans are provided by private insurance companies that are contracted with Medicare.

Because Medicare Advantage plans are administered by private companies, each company gets to set its own costs, including monthly premiums, deductibles, copayments and coinsurances. Additionally, each plan will be subject to something called a maximum out-of-pocket limit (MOOP).

The MOOP limit for each Medicare Advantage plan is the maximum amount you will spend on healthcare in a given year. Once your out-of-pocket costs reach this amount, the plan will pay 100% for your healthcare benefits until the start of the next plan year.

Your MOOP limit does not apply to your monthly premium. You'll need to continue to pay the Medicare Part B and Medicare Advantage plan premiums, even after your MOOP has been reached.

A MOOP limit is unique to Medicare Advantage plans. Original Medicare does not have this type of limit — you will always pay copayments and coinsurances if you only have Medicare Parts A and B. For some people, having a MOOP limit is a major benefit of Medicare Advantage plans because it defines exactly how much they'll pay for healthcare in a given year. Without this limit, someone with lots of healthcare needs might spend an extraordinary amount of money for services.

What counts toward my MOOP?

Out-of-pocket costs that contribute to your MOOP limit include copayments for doctors' and specialists' visits, and coinsurance for healthcare services and medical equipment covered under Medicare Parts A and B. Your plan might also count additional services, such as dental or vision, toward your limit.

Your monthly premiums and prescription drug costs do not count toward your MOOP limit. Some plans might also exclude out-of-network care from your MOOP or may have a combined in-network/out-of-network MOOP limit. You'll want to read your Summary of Benefits or Evidence of Coverage provided by your carrier to determine whether out-of-network services are included in the MOOP for your plan.

How much is my MOOP?

The U.S. government sets the standard MOOP each year. For 2024, the limit is $9,450. However, insurance companies are allowed to make their plans' MOOP limits lower than this standard. Therefore, every Medicare Advantage plan will have a different MOOP limit.

Your MOOP limit might increase year after year. Your insurance company will inform you of any changes to your plan, including your MOOP, to allow you to plan accordingly.

While you're searching for a Medicare Advantage plan, pay special attention to the MOOP limit. Consider this limit when calculating the costs of the plan, in addition to the monthly premium and any deductibles, copayments and coinsurances.

Are you looking for a Medicare plan that helps limit your out-of-pocket costs? PlanEnroll represents a range of Medicare plans that can connect you with the benefits you're eligible for.