An out-of-pocket limit is the maximum amount you can spend in one year on your covered medical services. It’s a form of protection for you. Original Medicare, Part A and Part B, doesn’t have an out-of-pocket limit. That means if you were hospitalized several times over the year or had many medical expenses, you might have to pay a lot of money.
There are a lot of new terms to learn when you enroll in health insurance, like Medicare. You may seewords such as assignment, coinsurance, and out-of-pocket limit. It’s important to understand what these words mean so you know what you have to pay when you get medical care. Knowing these terms alsohelps you compare plans and premiums to find the coverage that’s best for you financially.
Most Medigap plans don’t have out-of-pocket limits. However, they typically pay many of your Medicare Part A and Part B out-of-pocket costs. In many cases, your Medicare expenses stay low with Medicare Supplement insurance plans.
Two Medicare Supplement Insurance plans, Plan K and Plan L, work a bit differently. These plans have out-of-pocket limits set by the Centers for Medicare and Medicaid Services. What this means is that the plan may pay a percentage of certain covered Medicare expenses (50% for Plan K, 75% for Plan L) until your out-of-pocket costs hit the plan limit. After the out-of-pocket limit is met, the plan may pay 100% of your share of covered expenses under Part A and Part B. In 2021, the out-of-pocket limit for Plan K is $6,220. The 2021 Plan L out-of-pocket limit is $3,110.