MOOP: Maximum Out-of-Pocket Coverage

Maximum out-of-pocket coverage is essentially a cap on how much you would have to pay out of pocket each year for medical services. The idea is that, once you hit the cap, then your insurance will cover all costs that go beyond that.

The point of MOOP limits is to prevent beneficiaries from being burdened with never-ending or out-of-control expenses due to something like an ongoing health issue that you are continuously receiving treatment for.

It’s important to remember, if you have a plan that includes maximum-out-of-pocket coverage, it will reset at the end of each year. This means that you will once again have to pay out-of-pocket costs in the new year, even if they are for an ongoing health issue.

MOOP only applies to treatments or services that are covered by your insurance. So, even if you hit your out-of-pocket maximum, you will still have to pay for anything that is not covered by your insurance.

Original Medicare — Medicare Part A and Part B — does not have a maximum out-of-pocket limit.

Medicare Part A helps cover hospital costs if you are admitted as an inpatient to a hospital. Medicare Part B helps cover your medical costs for doctor office visits and similar health care.

But you have to pay coinsurance and copayments associated with the health care you receive if you have Original Medicare coverage.

Medigap plans — also known as Medicare Supplement insurance — helps cover your out-of-pocket costs if you have Original Medicare. Medigap policies are standardized plans sold through private insurers.

The federal government sets the maximum out-of-pocket limit for Medicare Advantage plans each year. For 2025, the MOOP limit is $9,350.

Once you hit these limits, you will not owe cost-sharing payments for services you receive for the rest of the year.

The limits are set pretty high; however, according to the Kaiser Family Foundation, most Medicare Advantage plan enrollees’ average cost was lower than the MOOP.

The type of Medicare Advantage plan you have can also affect your average out-of-pocket costs each year.

Medicare Advantage plans are also allowed to set their own MOOP limits — so long as they are below the maximum out-of-pocket limits set by the federal government.

Your yearly out-of-pocket costs will vary depending on how many medical services you need, how much they cost, your particular Medicare Advantage plan and multiple other factors. But you will not be required to pay more than the MOOP limit set by Medicare each year.

Copayments and coinsurance for Medicare-approved services apply toward your annual MOOP limit. Your deductible and monthly premiums typically do not apply toward your MOOP.

Typically, any out-of-pocket costs you would have with Original Medicare would apply toward your MOOP limit in a Medicare Advantage plan.

But your Medicare Advantage plan may also allow other out-of-pocket costs — such as vision, dental or hearing services not covered by Original Medicare — to apply to your MOOP as well.

Medicare Part D prescription drug plans do not have an out-of-pocket limit. But they have a set of reduced out-of-pocket payments phased in once you’ve spent certain amounts out-of-pocket.

Only two of the 10 standardized Medigap plans — Plan K and Plan L — have maximum out-of-pocket limits. The Medigap Plan K out-of-pocket limit for 2025 is $7,220. The limit for Plan L is $3,610.

While most Medigap plans cover 100% of many Medicare out-of-pocket costs, Plans K and L cover only a percentage of most costs. This is part of the reason these two plans have an out-of-pocket limit.

Once you meet your yearly out-of-pocket limit for Plan K or Plan L — along with your yearly Medicare Part B deductible — your Medigap plan will pay 100% of your covered services for the rest of the calendar year.

In addition to a Medigap plan — designed to cover out-of-pocket costs related to Original Medicare — there are other options to help with out-of-pocket costs.

But Medigap only works with Original Medicare and cannot be used with a Medicare Advantage plan.

Also, remember that Original Medicare and Medigap do not cover out-of-pocket expenses for most vision, dental and hearing services — but a Medicare Advantage plan may cover these.