When it comes to your Medicare coverage, there’s a lot that your plan, whether you have Original Medicare or Medicare Advantage, will pay for. But, as with any insurance, there are certain out-of-pocket costs that you’ll be expected to pay.
If you have a year that necessitates using your plan frequently, it’s reasonable to worry that your out-of-pocket (OOP) costs may grow exponentially. Luckily, Medicare has protections in place to make sure that your OOP costs don’t get out of hand! They’re in the form of a little category in your plan called MOOP.
What is MOOP?
Your MOOP is the maximum out-of-pocket cost for medical services that you’re expected to pay over the course of a year in your Medicare Advantage plan. In other words, it’s the limit to how much you will spend in out-of-pocket costs for medical services in a calendar year. Other popular names for MOOP are the maximum OOP, maximum OOPC, or out-of-pocket maximum.
MOOP is the limit on how much you can spend in out-of-pocket costs for medical services in a calendar year before your plan covers these costs.
Each Medicare Advantage plan is different, though $6,700 is a very common in-network limit and $10,000 is common for a maximum out-of-pocket limit that includes out-of-network costs. Even then, your it may change each year. Maximum OOPCs can be as low as $0 up to a maximum, which is established by Medicare and may change each year. In 2020, the Medicare established maximum OOP limit is $6,700. Please note that some PPO plans may have a higher combined MOOP. Plans will usually have an out-of-pocket maximum that’s easily comparable, especially with the Medicareful Plan Finder.
What Happens When You Reach Your Limit?
Once you surpass your MOOP limit, your Medicare Advantage plan will cover the remainder of your OOP costs for eligible services. So, let’s say your plan has a $6,700 out-of-pocket maximum. Once your expenditures surpass that amount, you’re generally not expected to cover anymore costs for in-network, Medicare-covered services. There are some exceptions to this, but besides those, you’re covered! Pretty cool, right?
Once your expenditures surpass that amount, you’re generally not expected to cover anymore costs for in-network, Medicare-covered services.
When you hit your maximum OOP limit, you’ll get a letter from your plan informing you of such. This letter should also let you know what costs (exceptions to the out-of-pocket maximum) that you’ll still be responsible for.
What are the Exceptions?
For the most part, you’ll still be on the hook for costs that don’t count toward your limit. For example, you’ll still pay premiums, like the Part B premium that may be part of your Medicare plan. (Your monthly Medicare Advantage premiums don’t count toward your limit.) You’ll also still be expected to pay for drug costs, since they don’t count toward your maximum OOP limit either.
Even after you hit the out-of-pocket maximum, your plan may not cover services outside of your plan’s network.
Another common exception to MOOP spending deals with your plan’s network. Even after you hit the out-of-pocket maximum, your plan may not cover services outside of your plan’s network. Some plans also have a higher maximum OOPC limit that includes out-of-network costs. When you meet this type of limit, your plan will then cover eligible out-of-network costs. Furthermore, if a service isn’t covered by your Medicare Advantage plan, your plan still won’t cover those costs.
What Counts Toward Your MOOP Limit?
At this point, you may be wondering what actually counts toward your MOOP limit. There are three types of payments that count toward your maximum OOP costs.
There are three types of payments that count toward your out-of-pocket maximum: copayments, coinsurances, and deductibles.
The first type is a copayment. Copayments are set fees you pay per use of a certain Medicare-approved service. These services can be anything from a doctor’s visit to transportation. Secondly, you have coinsurances. The difference between coinsurances and copayments is that coinsurances are usually a percentage of the total cost of a service.
The third and final type of payment that counts toward your out-of-pocket maximum is a deductible, which is a set amount you pay for a service, or services, before your plan begins to cover costs. The difference between copayments and deductibles is that copayments are paid each time, while deductibles add up each time you use the service(s) over the course of a set timeframe (often a year) — much like the maximum OOP limit.
Please note, any costs associated with outpatient drugs don’t count toward your Medicare Advantage MOOP limit.
Please note, any costs associated with outpatient drugs don’t count toward your Medicare Advantage MOOP limit. There is a separate Medicare Part D out-of-pocket limit for drug costs called the true out-of-pocket (TrOOP) limit.
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If you’re looking for a plan that may limit your OOP costs, the Medicareful Plan Finder can help you find and compare plans and maximum out-of-pocket limits in your area. If you have Original Medicare and are looking to save on OOP costs, don’t worry, you have options, too! A Medicare Supplement can cover many of your OOP costs and can also be easily found with the Medicareful Plan Finder.
Ultimately, Medicare will always have some costs associated with it, despite the robust and thorough coverage it offers. Luckily, for anyone that uses their plan a lot, MOOP limits are in place to protect beneficiaries from crippling expenses that can occur with long-term medical conditions or services.