Contact a Medicare Life Coach today

TTY: 711

Monday - Friday | 8AM - 8PM (CST)

Maximum Out-of-Pocket Limit

What Is the Maximum Out-of-Pocket Limit?

Healthcare can be expensive even with Medicare coverage. Many beneficiaries spend some of their annual income on out-of-pocket expenses after Medicare reimbursements. Individuals with lower incomes or complicated health conditions will probably pay the most. 

The agents at Trusted Senior Specialists can help you understand out-of-pocket maximums so you can choose the right Medicare plan for your needs.  

Medicare Costs Are Complex

The process of determining Medicare costs is complicated and can change based on your situation and plan options. Out-of-pocket maximums for Medicare Advantage plans can be extraordinarily complex because they present an array of different choices. 

There’s no limit on out-of-pocket expenses in original Medicare, or Medicare Part A and Part B.      

What Is an Out-of-Pocket Maximum?

The out-of-pocket maximum is also called the out-of-pocket limit. If you’re a policyholder, this is the most you’ll have to pay for covered health care each year. Once you meet your maximum, your Medicare Advantage provider must pay 100% of the total medical costs.

An Out-of-Pocket Maximum Offers Protection 

An out-of-pocket maximum protects both the insurance company and the policyholder. For the insurer, the amount secures their risk by having the policyholder pay for a percentage of the annual healthcare costs. For the beneficiary, a maximum provides a cap for their portion of the medical expenses. 

Medicare Advantage 2020 Out-of-Pocket Maximum

For 2020, the Medicare Advantage out-of-pocket maximum is $6,700. Programs can set lower limits but can’t require you to pay more than this amount out of pocket.

These numbers tend to increase every year. If you choose a lower monthly premium plan, it usually comes with a higher out-of-pocket maximum amount. Conversely, lower out-of-pocket maximums often bring higher premiums.  

Which Plan Is Right for Me?

The more healthcare you need, the quicker you will meet your out-of-pocket limit. 

If you think you’ll need plenty of care, plans with low out-of-pocket limits and higher premiums might be a good fit. 

On the flip side, if you don’t require loads of health care, you could lower your overall costs by choosing a policy with a higher out-of-pocket limit and lower premium.    

Costs That Go Towards Meeting the Out-of-Pocket Maximum

It’s critical to know what costs you pay on your own. Here are some costs that most Medicare plans include:


Your deductible is the fixed amount you have to spend on medical costs before insurance contributes. In general, costs that go towards reaching your deductible also go towards your out-of-pocket maximum.  


The coinsurance amount appears as a percentage. With most policies, after you’ve hit your deductible, you and your coverage split your medical expenses. If your coinsurance is 20%, after meeting your deductible, you’ll pay 20% of medical bills, and your insurer will pay 80%.  


Unlike coinsurance, the copayment is a prearranged rate you pay for healthcare in your time of need. When you go to the doctor or hospital, your plan could have a set amount, like $40 for office visits and $250 for a hospital visit — that you’re responsible for paying.  

Consider the out-of-pocket maximum as your deductible, coinsurance, and copayments (if your plan has them) adding up to a full amount. 

Costs That Don’t Go Toward Your Out-of-Pocket Maximum

Your monthly premium costs usually don’t count toward your out-of-pocket total. Regardless of how high your premium is, you must keep paying it each month to maintain your coverage — even after you’ve met your out-of-pocket limit.  

Healthcare services that your plan doesn’t cover, like some out-of-network providers, don’t count either.

We Can Answer Your Questions

No matter your situation, we can answer your questions about Medicare costs. Contact Trusted Senior Specialists to learn more about out-of-pocket limits and whether you qualify for savings on your plan. Our insurance help is free! Call (844) 325-8710 to get started.