out-of-pocket maximum

How Does The Medicare Advantage Out-of-Pocket Maximum Work?

Medicare Advantage helps policyholders save on inpatient, outpatient, and prescription drug costs without having to enroll in multiple policies at once. The comprehensive nature of its coverage is why many switch to it every year during Annual Enrollment, which takes place between October 15 and December 7. But one unique advantage to this plan is its out-of-pocket maximum.

What Counts Toward An Out-of-Pocket Maximum?

Out-of-pocket costs are directly related to the payments you make for your treatments, not premiums. Your deductibles, copayments, and coinsurance costs all count toward the out-of-pocket maximum. That is as long as these payments go toward services covered by Medicare Advantage.

Your payments for inpatient and outpatient services contribute to this, but prescription medications are not included here. Medicare Part D functions independently of Medicare’s inpatient and outpatient components.

How Does This Work?

As you seek medical treatments, the amount you pay out-of-pocket accumulates. In 2021, Medicare Advantage’s out-of-pocket maximum for in-network treatments is $7,550, and the out-of-pocket maximum for the combination of in-network and out-of-network is $11,300.

Since deductibles count toward the out-of-pocket maximum, the $1,484 Part A deductible (if you’re admitted as an inpatient) and the $203 Part B deductible are automatically part of the $7,550 you need to spend. Assuming you’ve had one hospital stay in addition to having paid the Part B deductible, only $5,863 will remain (if all services are in-network).

Once you reach these payment milestones, you pay nothing for your inpatient and outpatient costs. The only Medicare-related expense you’ll have will be the premiums for the rest of the year.

Out-of-pocket maximums change from year to year, and some companies may offer lower out-of-pocket maximums than others.

What Are The Benefits?

Once you’ve met the out-of-pocket maximum, you can get these services for free for the rest of the year:

  • Hospital visits, including surgeries and the hospital’s room and board
  • Hospice
  • Skilled nursing facility treatments
  • Preventive services such as chemotherapy, screenings, and immunizations
  • Durable medical equipment (e.g. blood glucose monitors and oxygen machines)

Also, because Medicare Advantage offers additional benefits that Original Medicare doesn’t cover, you’ll also get these services at no extra cost:

  • Dental
  • Vision
  • Hearing
  • Gym membership

How Can I Get Medicare Advantage?

There are a couple of instances in which you can get Medicare Advantage. The enrollment periods for this are:

  • Initial Enrollment Period, which spans from three months prior to when you turn 65, to the three months following the month you turned 65
  • Annual Enrollment Period. This lasts from October 15 to December 7, and this is the time when you can switch from Original Medicare to a Medicare Advantage policy

Find Out More Today—Give Us A Call

Peritia Advisors is proud to give you the chance to enjoy Medicare Advantage benefits that will be free of charge once you’ve covered your out-of-pocket maximum. We are always here to help, and we will answer any Medicare-related questions you may have.