5 answers to your questions about maximum out-of-pocket limits (MOOPs)

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Understanding Medicare costs starts with understanding key terms that pop up pretty frequently. One of those is maximum out-of-pocket limit (known as the MOOP). This refers to the most you’ll pay for copays, coinsurance, and deductibles for in-network covered medical services for the calendar year, not including your prescription drug costs or monthly premium. Once you reach your MOOP, your insurance company pays for 100 percent of your covered medical services.

Understanding MOOP is important, but it can be a bit confusing. Because we’re all about making Medicare simpler and easier to understand, the ApexHealth team wants to explain the term “maximum out-of-pocket limit” (MOOP) further and show how it affects your costs with Original Medicare, Medigap and Medicare Advantage plans.

1. Does Original Medicare have a maximum out-of-pocket limit?

Original Medicare (Parts A and B) doesn’t have a MOOP. This means that if you are hospitalized several times during the year and/or have a lot of medical expenses, you may end up paying a lot of money.

Why is that? There are costs associated with Original Medicare including your Part A and Part B deductibles, your Part B premium, your 20 percent Part B coinsurance and any Part A coinsurance for extended (over 60 days or 90 days) inpatient hospital stays, plus copayments. Without a maximum limit on your yearly out-of-pocket costs, you won’t be protected from excessive costs in the event that you need a lot of care or expensive treatments.

2. Do Medigap plans have maximum out-of-pocket limits?

Medigap policies are labeled Plans A, B, C, D, F, G, K, L, M and N, and their coverage is standardized. Some, but not all, Medigap plans have a MOOP. Only Medicare Supplement Plans K and L include annual out-of-pocket limits. These limits are set annually by the Centers for Medicare and Medicaid Services (CMS).

3. Do Medicare Advantage plans have maximum out-of-pocket limits?

All Medicare Advantage plans have a MOOP. Each year, CMS sets a limit. This means that a plan can’t set its limit higher than that amount, but it can set a limit for lower. Once your covered medical expenses meet your MOOP, the plan will pay 100 percent of your covered medical costs for the rest of the plan year. Make sure that you check with the plan that you’re interested in to confirm the limit they set.  

4. How does a maximum out-of-pocket limit work?

Some expenses count toward your MOOP while others don’t. To keep it simple, we put together this table to help you break it down.

Counts towards your MOOPDoesn’t count towards your MOOP
Copays and deductibles for doctors’ visits, emergency room visits, hospital stays, outpatient visits and specialistsYour monthly premium
Coinsurance for durable medical equipment, healthcare services and x-raysPrescription drug costs
Covered services from in-network healthcare providersAny services from out-of-network healthcare providers unless the care is authorized by your plan

You can find more details specific to your plan’s MOOP by looking at the Summary of Benefits.

5. How can having a maximum out-of-pocket limit save you money?

There are a number of potential scenarios where having a Medicare Advantage plan with a MOOP saves you money. Most of you visit your primary care doctor throughout the year, and any copays go toward your MOOP. In addition, any hospital stays, services there, surgeries and/or follow-up treatments would also go toward your MOOP. These costs could add up! Once you hit your MOOP, you won’t have to worry about paying for additional doctor’s visits or hospital stays for that year.

If you’re someone with health issues or chronic conditions, you may require a lot of care and services. Having a MOOP can help save you money. Even if you don’t, a MOOP can help cover you in case of any unplanned medical emergencies or procedures. It’s always a good idea to make sure you’re covered so you can continue to go out there and live life boldly!

When shopping for Medicare Advantage plans, take a closer look at the maximum out-of-pocket limit listed. If you have any more questions, the ApexHealth team is always here to help. We’ll continue to provide more content based on your frequently asked questions (FAQs). Give us a call at (844) 279-0508 (TTY: 711) to speak with a licensed representative or an ApexAssistant. Our hours of operation are Monday through Friday 8 a.m. – 8 p.m. (local time) from Apr. 1 through Sept. 30 and seven days a week 8 a.m. – 8 p.m. (local time) from Oct. 1 through Mar. 31.

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