Dear AMAC,
I am considering enrolling in a Medicare Advantage plan when I begin Medicare but there is one aspect I cannot wrap my head around- the Maximum out of Pocket. Is this a deductible I pay before the plan kicks in? If so, this large amount would really put a dent in my finances.
-Carol (St. Augustine, FL)
Dear Carol,
The Maximum out-of-Pocket (MOOP) is an annual cap on how much you pay for your medical expenses. Once you reach this limit, you will pay nothing for covered services for the duration of the year. So, it works like a safety net for the consumer, not a deductible. Now, each plan can have a different limit, and that limit can change each year. You should consider this when choosing a plan.
Keep in mind that after your reach your deductible (if your plan has one), you are only paying a portion of your costs until you reach the Maximum-out-of-Pocket. Copayments and coinsurances are the part you pay on your end after the plan pays their portion. Some people may never meet their MOOP unless something catastrophic happens.
In 2021, the MOOP for Medicare Advantage Plans is $7,550, but some plans may set lower limits. If you choose a PPO, your plan may set two annual limits on your out-of-pocket costs. One limit is for in-network costs and the other is for combined in-network and out-of-network costs. PPO plans usually have a higher MOOP that can be as high as $11,300 for out-of-network services.
It is important to remember that your monthly premiums do not count towards the MOOP. Also, drug deductibles and copayments will not count, nor will services like routine dental, vision or hearing.
I hope that helps clear up the Maximum-out-of-Pocket mystery for you Carol.
Sincerely,
Your Medicare Advisor
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