Do My Monthly Medicare Premiums Count Towards my Out of Pocket Maximum?

Mike Olmos by Mike Olmos | Licensed since 2010
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This article was updated on: 11/21/2018

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In short, Medicare Advantage plan premiums do not count towards your Medicare Advantage out of pocket maximum. Read on to learn more about premiums and out of pocket maximums for Medicare Advantage plans.

What is a Medicare premium?

A Medicare premium is amount you pay to have Medicare coverage, whether or not you use covered services. Most types of Medicare coverage may charge you a monthly premium, including Medicare Part B (Original Medicare), Medicare Part D, Medicare Supplement plans, and Medicare Advantage plans.

Most people don’t pay a Medicare Part A premium. Some Medicare Advantage plans have monthly premiums as low as $0. If you pay more than $0, for example $104 a month for your Medicare Advantage plan, that amount will not count towards reaching your Medicare Advantage out of pocket maximum.

No matter what you pay for your Medicare Advantage premium, you still must pay your Medicare Part B premium.

What is a Medicare Advantage plan out of pocket maximum?

All Medicare Advantage plans have an out of pocket maximum. A Medicare Advantage out of pocket maximum is a limit on the amount you will pay out of pocket before your covered medical expenses are paid for the rest of the calendar year.

In 2018, the Medicare Advantage out of pocket maximum was $6,700. Some Medicare Advantage plans may have lower out of pocket maximums, for example $4,900.

An out of pocket maximum can be a reassuring thing. Without one, you could end up paying tens of thousands of dollars or more on medical bills if you need a lot of care. An out of pocket maximum resets every year, meaning what you paid in 2017 will not count towards your out of pocket maximum in 2018.

What costs count towards the Medicare Advantage plans out of pocket maximum?

Many Medicare Advantage plans have networks. Generally the amount you pay for covered medical services in-network count towards your out of pocket maximum. Examples of costs that generally count towards your out of pocket maximum would include for example:

  • A $35 copayment you pay to visit a specialist
  • A $25 copayment for eyeglasses
  • A $875 copayment for an inpatient hospital stay ($175 a day for first 5 days)

Other copayments that generally count towards your out of pocket maximum include emergency room copayments, coinsurance for X-rays and radiology, copayments for outpatient rehabilitation, and coinsurance for durable medical equipment. Copayments and coinsurance not listed here may count as well.

Your insurance plan’s Summary of Benefits and Evidence of Coverage will provide detailed information about the actual deductibles, copayments, coinsurance, and other out-of-pocket costs that may apply to your Medicare Advantage out of pocket maximum.

What costs don’t count towards the Medicare Advantage out of pocket maximum?

Medicare Advantage premiums are not the only cost that don’t count towards the out of pocket maximum. Other costs that generally don’t count could include:

  • Any care you get out of network, including doctor visits and hospital stays
  • A coinsurance you pay for a prescription drug
  • The cost for a cosmetic procedure or other type of service not covered by your plan
  • Medical bills you paid in a previous year

Do you want to find a Medicare Advantage plan with a low out of pocket maximum? Just enter your zip code on this page to start browsing and comparing Medicare Advantage plans.

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