Medicare Out-of-Pocket Maximum: Original Medicare vs. Medicare Advantage

An out-of-pocket maximum is the most you'll pay for covered medical care in a year. Once you reach it, your plan pays 100 percent for the rest of the year. It's one of the biggest differences between Original Medicare and Medicare Advantage, and it's something many people don't learn about until a large medical bill arrives.

This guide explains how each option handles your yearly costs, what counts toward a limit, what doesn't, and the current caps.

What an Out-of-Pocket Maximum Is

Think of it as a ceiling on your medical bills. During the year, you pay deductibles (the amount you pay before coverage starts), copays (a flat fee per visit), and coinsurance (a percentage of the bill). All of those add up. Once the total reaches your plan's maximum, you stop paying for covered care until January 1, when the count resets.

Not every kind of Medicare coverage has one.

Original Medicare: No Out-of-Pocket Maximum

Original Medicare is Part A (hospital insurance) and Part B (medical insurance), run by the federal government. It does not have an out-of-pocket maximum. There's no ceiling on what you can pay in a year.

Here's how the costs work in 2026:

Part A (hospital stays).

You pay a deductible of $1,736 for each benefit period. A benefit period starts the day you're admitted and ends once you've been out of the hospital for 60 days in a row. That means you could pay the deductible more than once in a year if you have separate hospital stays. After 60 days in the hospital during one benefit period, you also pay $434 per day for days 61 through 90.

Part B (doctor visits and outpatient care).

You pay a deductible of $283 for the year. After that, you pay 20 percent of the Medicare-approved amount for most services. There's no limit on that 20 percent. If you need chemotherapy, dialysis, or a long course of outpatient treatment, the 20 percent keeps adding up.

For many people in good health, this is manageable. For someone with a serious illness, it can get expensive. That's why many people on Original Medicare add a Medicare Supplement plan (Medigap) to fill the gaps.

Medicare Advantage: A Yearly Cap, Set by Law

Medicare Advantage plans (Part C) are offered by private insurance companies. Every one of them is required to have an out-of-pocket maximum for the medical care covered under Part A and Part B.

Medicare sets the highest limit a plan is allowed to use each year:

Those are ceilings, not what every plan charges. Many plans set their limit lower than the maximum allowed. The number is listed in the plan's Summary of Benefits and in the Annual Notice of Change you get each fall.

The limit resets every January 1.

What Counts Toward the Limit

For a Medicare Advantage plan, these payments count:

• Deductibles for medical care.
• Copays for doctor visits, specialist visits, urgent care, and emergency room visits.
• Coinsurance for hospital stays, outpatient surgery, lab work, imaging, and other covered Part A and Part B services.
• Costs for in-network care (and out-of-network care too, if you're in a PPO plan with a combined limit).

What Doesn't Count

This is where people get caught off guard:

Monthly premiums.

Your Part B premium and any plan premium don't count toward the limit.

Prescription drugs.

Part D drug costs have their own separate cap. In 2026, the most you'll pay out of pocket for covered Part D drugs is $2,100. In 2027, that rises to $2,400. That cap is separate from, and in addition to, your medical out-of-pocket maximum.

Out-of-network care on an HMO plan.

HMO plans generally don't cover care outside the network except in emergencies, so those bills don't count toward the limit and may not be covered at all.

Services the plan doesn't cover.

Cosmetic procedures, dental and vision beyond what the plan includes, and anything Medicare itself doesn't cover.

So the true yearly ceiling for someone on a Medicare Advantage plan with drug coverage is the medical maximum, plus the Part D cap, plus premiums.

Where Medigap Fits In

Medigap plans work with Original Medicare, not Medicare Advantage. You can't have both.

A Medigap plan pays some or all of the costs Original Medicare leaves behind: the Part A deductible, the 20 percent Part B coinsurance, and more, depending on the plan letter (A through N). Because Medigap covers those gaps directly, most Medigap plans don't need an out-of-pocket maximum. The gaps are already paid.

Two Medigap plans, Plan K and Plan L, work a little differently. They pay a percentage of your costs and have their own yearly out-of-pocket limits. Once you reach the limit, they pay 100 percent for the rest of the year.

The trade-off is that Medigap plans have a monthly premium on top of your Part B premium. You pay a predictable amount each month in exchange for fewer surprise bills.

Side by Side

Which Setup Fits You?

There's no single right answer. A few questions help:

How is your health?

If you expect a lot of care this year, a known ceiling (Medicare Advantage) or full gap coverage (Medigap) may matter more than a low monthly premium.

Do you want to keep specific doctors?

Original Medicare, with or without Medigap, lets you see any doctor who accepts Medicare. Medicare Advantage uses a network.

Do you prefer paying monthly or paying as you go?

Medigap is more predictable month to month. Medicare Advantage often has a lower premium but more cost-sharing when you use care.

Do you travel or split time between places?

Original Medicare works anywhere in the country. Many Medicare Advantage networks are local.

A licensed agent can run through these with your actual doctors, hospitals, and medications in hand. That's the only way to compare real numbers. Our Medicare calculator is a good place to start.

Talk It Through with a Local Agent

If you'd like help comparing how Original Medicare, Medigap, and Medicare Advantage would handle your yearly costs, the licensed agents at Clutch City Insurance can walk through it with you using your own doctors and prescriptions. There's no cost and no pressure.

Call 713-870-5044, Monday through Friday, 8:30am to 5pm, or contact us online. Our agents speak 17 languages, and home visits are available across the Houston area.