When comparing Medicare Advantage plans, many people look first at the monthly premium.
But there is another number that can be just as important — and sometimes more important:
The maximum out-of-pocket limit.
Often called the MOOP, this is the most you can be required to pay during the year for covered Medicare Part A and Part B services, subject to the rules of your plan.
Understanding this number can help you evaluate how much financial risk you could face if you have a year with significant healthcare needs.
What Is the Maximum Out-of-Pocket Limit?
A Medicare Advantage plan’s maximum out-of-pocket limit is an annual cap on what you pay for covered Medicare Part A and Part B services.
Your costs that count toward the limit may include things such as:
- Copays
- Coinsurance
- Deductibles for covered medical services
- Other qualifying cost-sharing under the plan
Once you reach your plan’s applicable maximum out-of-pocket limit, the plan generally pays 100% of the cost of covered Medicare Part A and Part B services for the rest of that calendar year.
The limit resets at the beginning of the next calendar year.
A Simple Example
Suppose your Medicare Advantage plan has a maximum out-of-pocket limit of $5,500 for covered in-network Part A and Part B services.
During the year, you have several specialist visits, diagnostic tests, outpatient procedures and a hospital stay.
As you receive those services, the copays and coinsurance that count toward your plan’s maximum out-of-pocket limit accumulate.
If you eventually reach $5,500 in qualifying out-of-pocket costs, you generally stop paying cost-sharing for additional covered Part A and Part B services for the rest of that calendar year.
The plan pays the covered medical costs according to its rules.
That doesn’t necessarily mean every expense you have becomes free, however.
There are important exclusions.
What Usually Does Not Count Toward the Medicare Advantage MOOP?
One of the biggest sources of confusion is assuming that every dollar you spend on healthcare counts toward the maximum.
It doesn’t.
Depending on the plan and expense, amounts that generally do not count toward the Part A and Part B maximum out-of-pocket limit can include:
- Your Medicare Part B premium
- Your Medicare Advantage plan premium
- Costs for services the plan doesn’t cover
- Certain costs that fall outside the plan’s coverage rules
- Prescription drug costs
That last item is especially important.
Prescription Drug Costs Have a Separate Limit
The Medicare Advantage medical maximum out-of-pocket limit should not be confused with the Part D prescription drug out-of-pocket limit.
For 2026, Medicare prescription drug coverage has a separate annual out-of-pocket cap of $2,100 for covered Part D drugs.
So if you have a Medicare Advantage plan that includes Part D drug coverage, you may effectively be dealing with two different cost protections:
Medical services: Your Medicare Advantage plan’s maximum out-of-pocket limit for covered Part A and Part B services.
Prescription drugs: The separate Part D annual out-of-pocket cap for covered medications.
They are not the same limit.
Does Every Medicare Advantage Plan Have the Same MOOP?
No.
Medicare Advantage plan costs vary by plan, including the out-of-pocket limit.
One plan might have a lower maximum out-of-pocket amount than another.
That can matter significantly.
Consider two plans:
Plan A
- $0 monthly plan premium
- $7,000 maximum out-of-pocket limit
Plan B
- $40 monthly plan premium
- $4,500 maximum out-of-pocket limit
Which plan costs less?
There isn’t enough information to answer that question from the premium alone.
If you use very little healthcare, the $0-premium plan might result in lower overall spending.
If you experience significant medical needs, the plan with the lower maximum out-of-pocket limit could provide greater financial protection.
That’s why premium alone doesn’t tell you the real cost of a Medicare Advantage plan.
In-Network vs. Out-of-Network Limits
This becomes particularly important with Medicare Advantage PPO plans.
Medicare notes that plans may have different annual limits for in-network and out-of-network services.
For example, a PPO may have:
- One maximum for services received from in-network providers
- A larger combined maximum involving both in-network and out-of-network services
The exact structure depends on the individual plan.
If you have a PPO and regularly use providers outside the network, don’t look only at the in-network MOOP.
Review the plan’s rules for both.
Why Does the MOOP Matter If I’m Healthy?
It can be easy to ignore the maximum out-of-pocket limit if you rarely see a doctor.
But the MOOP isn’t really about predicting a normal year.
It’s about understanding what could happen during an expensive healthcare year.
A serious illness, surgery, hospitalization or extended course of treatment can quickly result in repeated copays and coinsurance.
No one enrolls in Medicare Advantage expecting to reach the maximum out-of-pocket amount.
But knowing the number tells you something important:
How much financial exposure could I potentially have for covered medical services this year?
That’s a useful question even when you’re healthy today.
Original Medicare Works Differently
This is one of the major differences between Original Medicare and Medicare Advantage.
Medicare says Original Medicare itself has no annual limit on what you pay out of pocket for covered Part A and Part B services unless you have additional coverage such as a Medicare Supplement policy, Medicaid, employer coverage or other supplemental protection.
Medicare Advantage plans, by contrast, have an annual out-of-pocket limit for covered Medicare services.
That doesn’t automatically make one type of coverage better than another.
Original Medicare beneficiaries may purchase Medicare Supplement insurance to help cover certain out-of-pocket costs.
The important point is that the financial structures work differently.
MOOP Does Not Mean That’s What You’ll Spend
Another common misunderstanding is thinking:
“My plan has a $5,000 maximum out-of-pocket limit, so Medicare expects me to spend $5,000.”
No.
The MOOP is a ceiling, not an estimate.
You might spend very little during the year.
Someone else enrolled in the same plan might have extensive medical care and eventually reach the limit.
How much you actually spend depends on the healthcare services you use and the plan’s cost-sharing for those services.
Why Compare MOOP When Choosing a Medicare Advantage Plan?
When evaluating Medicare Advantage plans, I recommend looking at several numbers together:
- Monthly plan premium
- Medical deductible, if any
- Primary care copays
- Specialist copays
- Hospital cost-sharing
- Outpatient procedure costs
- Diagnostic imaging costs
- Skilled nursing costs
- Prescription costs
- Maximum out-of-pocket limit
Then consider how those numbers fit your own health situation.
The lowest premium isn’t always the lowest-cost plan.
And the lowest MOOP isn’t automatically the best plan either.
Doctors, hospitals, prescriptions, benefits and coverage rules still matter.
Can the Maximum Out-of-Pocket Limit Change Every Year?
Yes.
Medicare Advantage plan costs can change from year to year, including the plan’s out-of-pocket limit.
That’s another reason to review your Annual Notice of Change (ANOC) each fall.
When reviewing your plan for the coming year, don’t just check whether the premium changed.
Look for changes to:
- Copays
- Coinsurance
- Deductibles
- Hospital costs
- Maximum out-of-pocket limit
- Prescription coverage
- Provider network
A plan that worked well this year may have a different cost structure next year.
A Good Question to Ask When Comparing Plans
Instead of asking only:
“What’s the monthly premium?”
Also ask:
“What could I potentially pay if I have a bad health year?”
The maximum out-of-pocket limit helps answer that question.
It doesn’t tell you what you will spend.
It tells you something about the upper boundary of your medical cost-sharing for covered Part A and Part B services under the plan.
The Bottom Line
The Medicare Advantage maximum out-of-pocket limit is one of the most important numbers on a plan’s benefit summary.
It represents an annual cap on your qualifying out-of-pocket costs for covered Medicare Part A and Part B services.
Once you reach your plan’s applicable limit, the plan generally pays 100% of covered Part A and Part B services for the rest of the calendar year.
When comparing Medicare Advantage plans, don’t look only at the monthly premium.
Look at:
What will I pay when I use healthcare — and what is the most I could potentially have to pay?
Understanding both numbers gives you a much better picture of the financial side of your Medicare coverage.
Medicare Guidance for Minnesotans
At YourMedicareMN, our focus is education first.
Understanding the differences between Original Medicare, Medicare Advantage, Medicare Cost Plans and Medicare Supplement coverage can make it easier to evaluate which approach fits your individual healthcare needs.
Medicare doesn’t have to be one-size-fits-all.
Visit Contact Us to schedule a personalized Medicare review and get answers tailored to your situation.
For official Medicare information, visit the Medicare.gov website.
YourMedicareMN is not connected with or endorsed by the U.S. government or the federal Medicare program. Plan availability and benefits vary by location and plan. Contact the plan or Medicare for complete plan information.
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