Understanding healthcare expenses is an important part of choosing the right Medicare coverage. Medicare Advantage plans include several cost-sharing requirements, such as monthly premiums, deductibles, copayments, and coinsurance. However, these plans also provide an important financial protection known as the out-of-pocket maximum.
The Medicare Advantage out-of-pocket maximum, also called the Maximum Out-of-Pocket (MOOP) limit, places a yearly cap on how much beneficiaries pay for covered Medicare Part A and Part B healthcare services. Once this limit is reached, the plan generally pays 100% of covered medical services for the remainder of the calendar year.
Understanding how this limit works can help beneficiaries evaluate healthcare expenses, compare available coverage options, and make informed decisions about their Medicare Advantage plans.
This guide explains the Medicare Advantage out-of-pocket maximum, what expenses count toward it, how it differs between plans, and why it matters when selecting Medicare coverage.
What Is the Medicare Advantage Out-of-Pocket Maximum?
The Medicare Advantage out-of-pocket maximum is the highest amount a beneficiary must pay during a calendar year for covered Medicare Part A and Part B services under their plan.
Medicare requires Medicare Advantage plans to establish an annual out-of-pocket limit for covered medical services. This protection helps prevent beneficiaries from facing unlimited cost-sharing expenses for covered healthcare.
The maximum amount varies depending on the plan. Some Medicare Advantage plans establish lower limits, while others may have limits closer to the maximum allowed by Medicare.
Once a beneficiary reaches the applicable out-of-pocket maximum, the plan pays 100% of covered Part A and Part B services for the remainder of that calendar year.
For 2026, the federal maximum limits are:
- In-network services: $9,250.
- Combined in-network and out-of-network services: $13,900 for plans offering applicable out-of-network coverage, such as PPOs.
Individual plans may offer lower limits than these federal maximums.
For more information about healthcare expenses, visit Costs Associated with Medicare Advantage Plans.
How Does the Medicare Advantage Out-of-Pocket Maximum Work?
The out-of-pocket maximum works by tracking eligible cost-sharing payments made by beneficiaries for covered medical services throughout the calendar year.
These payments generally include applicable copayments, coinsurance, and deductibles for Medicare Part A and Part B services.
Each time you receive a covered healthcare service, your share of the cost is applied toward the plan’s applicable out-of-pocket limit.
Once your eligible expenses reach that limit, the plan pays 100% of covered Medicare Part A and Part B services for the rest of the year.
However, it is important to understand that not every healthcare expense counts toward this limit.
Monthly premiums, noncovered services, and prescription drug expenses generally do not count toward the Medicare Advantage medical out-of-pocket maximum.
Beneficiaries should review their plan’s Evidence of Coverage document to understand which expenses qualify.
What Is the Medicare Advantage Out-of-Pocket Maximum for 2026?
Medicare establishes maximum out-of-pocket limits that Medicare Advantage plans must follow. Plans can choose lower limits, but they cannot exceed the applicable federal maximums.
For the 2026 coverage year, the maximum allowable limits are:
| Coverage Type | 2026 Maximum Limit |
|---|---|
| In-network medical services | $9,250 |
| Combined in-network and out-of-network services | $13,900 |
These amounts represent the highest permitted limits, not the amount every beneficiary must pay.
Many Medicare Advantage plans establish lower out-of-pocket maximums to provide additional financial protection.
According to KFF’s 2026 analysis, the average in-network out-of-pocket limit among Medicare Advantage enrollees is $5,421. For applicable PPO coverage combining in-network and out-of-network services, the average is $9,825.
These averages demonstrate why beneficiaries should compare individual plan limits rather than assuming every plan has the same financial protection.
Learn more through KFF’s Medicare Advantage Out-of-Pocket Limits Report.
What Expenses Count Toward the Medicare Advantage Out-of-Pocket Maximum?
Understanding which expenses count toward the out-of-pocket maximum is essential when reviewing your Medicare Advantage coverage.
Generally, eligible cost-sharing payments for covered Medicare Part A and Part B services count toward the medical out-of-pocket limit.
These may include:
1. Deductibles
A deductible is the amount beneficiaries must pay for certain covered healthcare services before their plan begins sharing the costs.
Depending on the plan, medical deductibles may apply to specific services or categories of healthcare.
Eligible medical deductible payments generally count toward the applicable out-of-pocket maximum.
2. Copayments
A copayment is a fixed amount beneficiaries pay when receiving certain healthcare services.
Medicare Advantage plans may charge copayments for primary care appointments, specialist visits, hospital services, and other covered treatments.
Eligible copayments for covered Part A and Part B services generally contribute toward the annual out-of-pocket limit.
3. Coinsurance
Coinsurance is the percentage of a covered healthcare expense that beneficiaries are responsible for paying.
The percentage can vary depending on the plan and the type of medical service received.
Eligible coinsurance payments for covered Medicare services generally count toward the applicable maximum.
4. Covered Hospital Services
Medicare Advantage plans provide coverage for Medicare-covered inpatient hospital services under Part A.
Beneficiaries may have cost-sharing responsibilities depending on their plan’s hospital coverage structure.
Eligible cost-sharing payments for covered hospital services count toward the applicable medical out-of-pocket maximum.
5. Covered Outpatient Medical Services
Part B covers various outpatient healthcare services, including doctor visits, medical examinations, certain diagnostic services, and medically necessary treatments.
When beneficiaries receive these covered services, their applicable cost-sharing payments generally contribute toward their plan’s out-of-pocket maximum.
What Expenses Do Not Count Toward the Out-of-Pocket Maximum?
Although the Medicare Advantage out-of-pocket maximum provides important financial protection, it does not include every expense associated with healthcare coverage.
Some payments remain separate from the medical out-of-pocket limit.
Monthly Plan Premiums
Monthly premiums generally do not count toward the annual out-of-pocket maximum.
This includes any additional monthly premium charged by the Medicare Advantage insurance company.
Beneficiaries must continue paying applicable premiums even after reaching their medical out-of-pocket limit.
Medicare Part B Premiums
Medicare Part B premiums are separate from Medicare Advantage medical cost-sharing expenses.
Beneficiaries generally must continue paying their Part B premiums to maintain Medicare Advantage enrollment.
Reaching the plan’s out-of-pocket maximum does not eliminate this payment obligation.
Prescription Drug Expenses
Prescription drug expenses are generally tracked separately from the Medicare Advantage medical out-of-pocket maximum.
For 2026, the annual out-of-pocket threshold for covered Part D prescription drugs is $2,100 under the standard Part D benefit.
This prescription drug limit is separate from the Medicare Advantage medical out-of-pocket maximum.
Noncovered Healthcare Services
Expenses for services that are not covered by your Medicare Advantage plan generally do not count toward the annual medical limit.
This may include certain elective services, excluded treatments, or services that do not meet the plan’s coverage requirements.
Beneficiaries should review their coverage documents to understand which services are included.
Certain Out-of-Network Expenses
Out-of-network expenses may be treated differently depending on the type of Medicare Advantage plan.
For example, an HMO generally limits coverage to participating network providers, except for specific circumstances such as emergencies and certain other covered situations.
A PPO may provide coverage for eligible out-of-network services, but beneficiaries may face higher cost-sharing requirements.
Some out-of-network payments may count toward a separate combined limit, while other expenses may not qualify. Always check your plan’s specific rules.
Difference Between In-Network and Out-of-Network Out-of-Pocket Maximums
Medicare Advantage plans may establish different out-of-pocket limits depending on whether healthcare services are received from participating network providers.
Understanding this distinction is important when comparing HMO and PPO plans.
In-Network Out-of-Pocket Maximum
The in-network out-of-pocket maximum applies to eligible cost-sharing payments for covered services received from healthcare providers within the plan’s approved network.
HMO plans generally require beneficiaries to use network providers for most routine healthcare services.
These plans may offer lower out-of-pocket maximums because they encourage members to receive covered care within the designated network.
Combined In-Network and Out-of-Network Maximum
Some PPO plans provide an additional combined out-of-pocket maximum that includes eligible cost-sharing payments for covered in-network and out-of-network services.
This structure allows beneficiaries to access certain healthcare services outside the plan’s network, although the associated costs may be higher.
The combined maximum does not mean every out-of-network service is covered. Coverage remains subject to the plan’s terms and conditions.
Before enrolling, review both limits and understand which services qualify toward each one.
Why Is the Out-of-Pocket Maximum Important When Choosing a Medicare Advantage Plan?
The out-of-pocket maximum is an important factor when comparing Medicare Advantage plans because it helps beneficiaries understand their potential financial responsibility for covered medical services.
Here are several reasons why this limit matters.
1. Provides Financial Protection
The annual out-of-pocket maximum helps limit the amount beneficiaries must pay toward covered Medicare medical services during the year.
Once the applicable limit is reached, the plan generally covers 100% of eligible Part A and Part B services for the rest of the calendar year.
2. Helps Estimate Annual Healthcare Expenses
Comparing out-of-pocket limits can help beneficiaries evaluate their potential medical expenses.
Although the maximum does not represent guaranteed annual spending, it provides an important reference point when reviewing plan costs.
3. Makes Plan Comparisons Easier
Medicare Advantage plans have different premiums, deductibles, copayments, and coinsurance requirements.
Comparing their annual out-of-pocket limits provides another way to evaluate the overall financial protection offered by each plan.
4. Helps With Healthcare Budget Planning
Knowing the maximum amount you may be responsible for paying toward covered medical services can help with financial planning.
Beneficiaries should consider this limit alongside monthly premiums, prescription drug costs, and other healthcare expenses.
5. Highlights Differences Between Plan Options
Two Medicare Advantage plans may have similar monthly premiums but different out-of-pocket maximums.
Reviewing these limits can help beneficiaries identify important differences in the financial structure of available coverage.
How to Compare Medicare Advantage Out-of-Pocket Maximums
Choosing a Medicare Advantage plan requires reviewing more than its advertised monthly premium.
The out-of-pocket maximum should be considered alongside other coverage details.
Use the following factors when comparing plans:
- Annual Out-of-Pocket Maximum: Compare the yearly medical spending limits for in-network and applicable out-of-network services.
- Monthly Premium: Check whether the plan charges an additional premium beyond Medicare Part B.
- Medical Deductibles: Understand which services require deductible payments.
- Copayments and Coinsurance: Compare your share of the costs for doctor visits, hospital stays, and other covered services.
- Provider Networks: Confirm that your preferred healthcare providers participate in the plan.
- Prescription Drug Coverage: Review covered medications, drug costs, and pharmacy requirements separately.
- Additional Benefits: Check the availability and limitations of dental, vision, and hearing benefits.
You should also review the plan’s Summary of Benefits and Evidence of Coverage documents before making a final decision.
For additional guidance, explore Medicare Advantage Plans and compare the coverage options available in your area.
Medicare Advantage Out-of-Pocket Maximum vs. Original Medicare
One important difference between Medicare Advantage and Original Medicare is how they protect beneficiaries from high medical cost-sharing expenses.
Original Medicare includes Part A and Part B coverage but does not have a yearly out-of-pocket maximum for covered services.
This means beneficiaries may continue paying applicable deductibles, coinsurance, and other cost-sharing expenses throughout the year.
Medicare Advantage plans, on the other hand, are required to establish an annual out-of-pocket maximum for covered Medicare Part A and Part B services.
Beneficiaries with Original Medicare may consider Medicare Supplement Insurance, also called Medigap, to help cover certain healthcare expenses that Original Medicare does not pay.
Medigap works alongside Original Medicare rather than replacing it. It cannot be used to cover Medicare Advantage cost-sharing expenses.
Learn more about Medicare Supplement Insurance Plans to understand the differences between these coverage options.
Conclusion
The Medicare Advantage out-of-pocket maximum is an important financial protection that limits how much beneficiaries pay for covered Medicare Part A and Part B services during a calendar year.
Understanding the annual limit, eligible expenses, provider network rules, and differences between plan types can help beneficiaries make better healthcare coverage decisions.
For 2026, Medicare Advantage plans cannot exceed $9,250 for in-network services or $13,900 for applicable combined in-network and out-of-network coverage. However, individual plans may offer lower limits.
Before selecting a plan, compare its out-of-pocket maximum alongside premiums, deductibles, copayments, coinsurance, provider networks, and prescription drug expenses.
Taking time to review these details can help you understand your potential healthcare costs and choose coverage that aligns with your financial and medical needs.
For more information about Medicare Advantage and Medicare Supplement options, visit Navigating My Medicare and explore the available Medicare resources.
Frequently Asked Questions (FAQs)
1. What is the Medicare Advantage out-of-pocket maximum?
The Medicare Advantage out-of-pocket maximum is the annual limit on eligible cost-sharing payments for covered Medicare Part A and Part B services. Once beneficiaries reach this limit, their plan generally pays 100% of covered medical services for the remainder of the calendar year.
2. What is the maximum out-of-pocket limit for Medicare Advantage in 2026?
For 2026, the maximum allowable out-of-pocket limit is $9,250 for in-network services. For applicable plans offering combined in-network and out-of-network coverage, the maximum is $13,900. Individual plans may establish lower limits.
3. Do Medicare Advantage premiums count toward the out-of-pocket maximum?
No. Monthly Medicare Advantage premiums and Medicare Part B premiums generally do not count toward the annual medical out-of-pocket maximum. Beneficiaries must continue paying applicable premiums even after reaching their plan’s limit.
4. Do prescription drug costs count toward the Medicare Advantage out-of-pocket maximum?
No. Prescription drug expenses are generally tracked separately under Medicare Part D. For 2026, the annual out-of-pocket threshold for covered Part D prescription drugs is $2,100.
5. Does Original Medicare have an out-of-pocket maximum?
No. Original Medicare does not have a yearly out-of-pocket maximum for covered Part A and Part B services. Beneficiaries may consider Medicare Supplement Insurance, Medicaid, or other qualifying coverage to help manage their healthcare expenses.
