Annual cap
Medicare Advantage out-of-pocket maximum.
Every Medicare Advantage plan has a yearly out-of-pocket cap. Here is what it covers, what it does not, and how to compare it across plans.
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What the cap covers
The in-network out-of-pocket maximum caps your annual spending on covered services received from in-network providers. Once you hit it, the plan covers 100% for the rest of the calendar year.
The cap typically includes:
- Deductibles, copays, and coinsurance for medical services
- Hospital stays (within plan rules)
- Skilled nursing facility days
- Specialist visits
What the cap does NOT cover
- Plan premiums — separate from out-of-pocket
- Part B premium — you keep paying this
- Prescription drug costs — Part D has separate rules
- Out-of-network care on HMOs — usually not covered at all, so no contribution to cap
- Out-of-network care on PPOs — counts toward a separate out-of-network OOP (typically higher)
- Services denied by prior authorization — you may owe full cost
See our prior authorization guide.
How to use it when comparing plans
- Note both the in-network AND combined (PPO) out-of-pocket max
- Compare it against the plan with no OOP cap (Original Medicare alone)
- Compare it against Medigap, which effectively caps cost very close to zero
- Multiply by your worst-case scenario odds — what would a major hospitalization actually cost on this plan?