Many people are shocked to learn that Original Medicare does not include an annual out‑of‑pocket maximum. That means there is no upper limit on how much a beneficiary could owe in deductibles, coinsurance and copays in a given year.
A single extended hospital stay or series of expensive treatments could result in tens of thousands of dollars in bills. To guard against this financial risk, beneficiaries can either enroll in a Medicare Advantage plan, which must cap costs at a certain level, or purchase a Medigap policy that caps or eliminates most out‑of‑pocket expenses.
Medicare Advantage plans set annual maximum out‑of‑pocket limits; for 2025, the government allows plans to charge up to $9,350 for in‑network services and $13,300 for out‑of‑network care. However, the actual limit varies by plan and region. Medigap plans offer different forms of protection. Plan G effectively sets the annual maximum at the Part B deductible (about $257 in 2025); once that amount is paid, all other Medicare‑approved costs are covered. High‑deductible Plan G imposes a maximum equal to the high deductible—$2,870 in 2025. Plans K and L have soft caps of $7,220 and $3,610 respectively, after which they pay 100 % of covered services. Note that these caps apply only to services covered by Medicare; they do not include monthly premiums or services Medicare does not cover, such as dental or vision care.
The article highlights that many people misinterpret the out‑of‑pocket limits listed for certain Medigap plans. The limits exist because those plans (notably Plan K and Plan L) pay only a percentage of cost‑sharing; without a maximum, beneficiaries could face unlimited expenses. Plans that cover 100 % of cost‑sharing, like Plan G and Plan N, do not list an out‑of‑pocket maximum because once the Part B deductible and copays are paid, there are no additional costs. Understanding these distinctions is crucial for choosing the right plan.
The article also advises checking for state and federal assistance programs. Low‑income beneficiaries may qualify for Medicare Savings Programs or Extra Help with prescription drugs. The Inflation Reduction Act is gradually capping prescription costs and eliminating the Part D coverage gap. These measures can further reduce out‑of‑pocket spending.
To explore how Medigap plans protect against unlimited medical bills and to see a comparison of different plan maximums, read the full article: Medicare Maximum Out Of Pocket.
