No Out-of-Pocket Maximum with Original Medicare
For beneficiaries enrolled in Original Medicare, there is no annual limit on how much they may have to pay in cost-sharing expenses. This includes the deductibles, copayments, and coinsurance associated with both Part A (Hospital Insurance) and Part B (Medical Insurance). Without additional coverage, a serious or prolonged illness could result in substantial and unpredictable medical bills.
Medicare Part A costs
Original Medicare Part A, which covers inpatient hospital care, skilled nursing facility care, hospice, and some home health care, includes a deductible that resets with every new "benefit period". This means you could potentially pay the deductible multiple times in a single year, and costs can escalate significantly for extended hospital stays:
- Deductible: \$1,676 per benefit period in 2025.
- Hospital Coinsurance (2025): \$0 for days 1-60; \$419 per day for days 61-90; \$838 per lifetime reserve day for days 91 and beyond (with 60 lifetime days available).
Medicare Part B costs
Part B, which covers most outpatient medical services like doctor visits, lab tests, and durable medical equipment, also lacks an out-of-pocket maximum. After meeting the annual deductible, you are typically responsible for 20% of the Medicare-approved amount for services, with no ceiling on these costs.
Maximums for Medicare Advantage and Part D
For individuals seeking protection from unlimited out-of-pocket costs, Medicare Advantage (Part C) and Part D plans are designed with annual spending caps to limit your financial exposure.
Medicare Advantage (Part C)
All Medicare Advantage plans, which are offered by private insurance companies, are legally required to include a maximum out-of-pocket (MOOP) limit for covered Part A and Part B services.
- In-Network MOOP: The federal cap for in-network services in 2025 is \$9,350. However, many plans set their limits lower than this federal maximum.
- Combined MOOP: For PPO plans, which cover out-of-network care, there is also a combined in- and out-of-network maximum, with a federal cap of \$14,000 in 2025.
- After Reaching the MOOP: Once your spending on covered services reaches this limit, the plan pays 100% of your costs for the remainder of the year.
Medicare Part D
For prescription drug coverage, changes implemented by the Inflation Reduction Act set an annual out-of-pocket cap for all Part D plans, whether standalone or part of a Medicare Advantage plan.
- Annual Cap (2025): In 2025, the out-of-pocket spending cap for covered prescription drugs is \$2,000.
- Catastrophic Coverage: After you reach the \$2,000 limit, you will pay nothing for covered Part D drugs for the rest of the calendar year.
- Not included: This cap does not include costs for non-formulary drugs or drugs covered under Part B.
Medigap Supplement Plans with Out-of-Pocket Limits
Most Medigap (Medicare Supplement Insurance) policies are designed to pay for the deductibles, coinsurance, and copayments left over by Original Medicare, effectively limiting your costs. However, only specific Medigap plans have an official, hard cap on annual spending.
- Plans K and L: These are the only two Medigap plans with annual out-of-pocket limits because they operate on a cost-sharing model. For 2025, the limit for Plan K is \$7,220, and for Plan L it is \$3,610. Once you meet the limit plus the Part B deductible, the plan pays 100% of approved costs.
- Other Medigap Plans: For plans like Plan G, your total out-of-pocket cost is essentially capped at the annual Part B deductible (\$257 in 2025), as the plan covers nearly all other cost-sharing expenses.
Medicare Plan Out-of-Pocket Maximum Comparison (2025)
| Medicare Plan Type | Out-of-Pocket Maximum | What is Covered by the Cap? | Notes |
|---|---|---|---|
| Original Medicare (Parts A & B) | None | N/A | No cap on cost-sharing; can lead to unlimited expenses. |
| Medicare Advantage (Part C) | Up to $9,350 (in-network cap) | Part A and B covered services (deductibles, copays, coinsurance) | Caps apply to medical services, not Part D drug costs or premiums. |
| Medicare Part D (Prescription Drugs) | $2,000 | Covered prescription drugs (deductibles, copays, coinsurance) | Applies to standalone Part D plans and MA plans with drug coverage. |
| Medigap Plan K | $7,220 | 50% of certain Medigap-covered costs (e.g., Part A deductible) | Plan pays 100% after limit met + Part B deductible. |
| Medigap Plan L | $3,610 | 75% of certain Medigap-covered costs (e.g., Part A deductible) | Plan pays 100% after limit met + Part B deductible. |
What Doesn't Count Toward a Maximum Out-of-Pocket?
It is crucial to understand that monthly premiums do not count towards the out-of-pocket maximum in any Medicare plan. This applies to your standard Part B premium, your Part C plan premium, and your Part D plan premium. Additionally, costs for services not covered by Medicare, such as most dental, vision, and hearing care, are also not included in your out-of-pocket cap calculations.
Conclusion: How to Protect Against High Costs
The answer to "Is there a max out-of-pocket for Medicare?" depends entirely on the type of coverage you have. While Original Medicare offers flexibility, it comes with the significant financial risk of no spending cap. Medicare Advantage plans offer a mandatory annual limit on medical costs, and Part D plans provide a separate cap for prescription drugs. For those who prefer Original Medicare, a Medigap plan, especially a comprehensive one like Plan G, can provide substantial financial protection by covering most out-of-pocket expenses. By carefully evaluating your health needs and financial security, you can choose the plan that best protects you from catastrophic costs.
For more information and personalized assistance in choosing a plan, consider reaching out to your State Health Insurance Assistance Program (SHIP) or visiting Medicare.gov.
