Many people are surprised to learn that Original Medicare does not include an annual cap on expenses, meaning deductibles, copays, and coinsurance can add up without limit. In contrast, Medicare Advantage plans are required to set an out-of-pocket maximum with limitations, and Medigap plans can significantly reduce your costs or provide a maximum limit on out of pocket expenses, depending on the plan you choose. In this article, we break down what the Medicare out-of-pocket maximum really means, how it works across different types of Medicare coverage, and how you can protect yourself from unexpected medical bills.
Key Takeaways
Original Medicare (Parts A and B) has no annual medicare out-of-pocket maximum, so beneficiaries can theoretically face unlimited costs for deductibles, copays, and coinsurance.
The two ways a Medicare beneficiary can place a limit an the maximum annula out of pocket costs for Medicare bills is to either add a Medicare supplement or replace their original Medicare with a Medicare Advantage plan.
Medicare Advantage plans (Part C) are required to have an out-of-pocket costs, which caps your yearly spending on covered, in-network services. For 2025, the highest allowed limit is $9,350 for in-network services and $13,300 for out of network services. Many plans offer lower limits, but these limits can change every year and will increase over time with inflation.
Medicare Supplement (Medigap) plans provide varying levels of coverage and out-of-pocket maximums, with some plans like Plan G offering very low maximums (limited to the Part B deductible which is under $300), while others like Plans K and L have higher limits due to partial coverage. All the Medicare supplement plans offer more insurance and lower out of pocket costs than Medicare Advantage plans.
Out-of-pocket limits do not include monthly insurance premiums or services not covered by Medicare or your Medicare replacement plan.
Some Medicare beneficiaries can access Medicare Savings Programs and other resources to help manage out-of-pocket expenses.
The Inflation Reduction Act and recent Medicare changes have impacted out-of-pocket limits, including eliminating the Part D coverage gap (“donut hole”) and capping prescription drug costs.
During initial conversations with clients, we are often asked, does Medicare have a maximum out of pocket limit for covered health services ? While the topic should be rather simple, I am amazed at the amount of confusion and incorrect information spread by professional insurance agents who are supposed to be knowledgable on this subject.
It’s important to note that monthly premiums for medical insurance, including drug coverage and Medcare Part B, are nor included in maximum out-of-pocket cost limits. Monthly premiums are recurring costs that beneficiaries pay each month, regardless of their out-of-pocket spending.
In this article I will be covering the subject of maximum out-of-pocket limits for Original Medicare (Medicare Part A and Medicare Part B), along with private medical insurance options, including Medicare supplement insurance, Medicare Part D prescription drug coverage and Medicare Advantage Plans.
What Is the Medicare Maximum Out-of-Pocket?
When a person first enrolls in Medicare, they typically start with Medicare Part A inpatient services and Medicare Part B, outpatient services. It is possible to get Medicare Part A months or year before Part B, but still, these are the two parts of Medicare that are required before deciding on a Medicare supplement or Medicare Advantage Plan.
Original Medicare does not have an annual maximum out-of-pocket limit. It was never intended to be a stand-alone full coverage option for seniors. There is no cap on Medicare out-of-pocket spending in Original Medicare, meaning your medicare out of pocket costs can theoretically be unlimited. Out of pocket costs or out of pocket expenses include deductibles, copayments, and coinsurance. These medical expenses can add up quickly without a maximum limit. The only way to place a maximum out-of-pocket on your financial risk for covered health services is to either purchase a Medicare supplement Plan or a Medicare Advantage Plan.
For those who qualify, Medicare beneficiaries can access savings programs that are available through Medicare savings programs o help manage out of pocket costs, including premiums, deductibles, copayments, and even costs related to prescription drugs.
Medigap Annual Out of Pocket Maximum Limit
Do Medicare Supplement Plans, which can be part of your medical insurance, have an annual out-of-pocket maximum?
Some medicare supplement plans have a hard annual maximum out of pocket lime and some have what I refer to as a “sof” maximum out of pocket.
For example, the out-of-pocket maximum for Plan G is equal to the Medicare Part B deductible ($283 for 2026) a “hard” fixed maximum out of pocket. The out-of-pocket maximum for high deductible Medigap plans is equal to their annual deductible ($2,950 in 2026), again a hard limit.
However, your out-of-pocket maximum for Plan N is the Part B deductible plus office/ emergency room copays. We have no way of knowing how many office visits you maay have in any given year, but can assume a reasonable. That is a soft annual maximum out of pocket limit.
For 2026 the out-of-pocket maximum for Plan K is $8,000 for Plan L is $4,000. The out-of-pocket maximum only refers to medical services approved or accepted by Medicare and does not include any services or procedures not covered by these supplement plans.
Do Medicare supplement plans have a maximum out-of-pocket. Yes, most Medicare supplement plans (aka Medigap Plans, also known as Medicare supplement insurance) have a defined annual maximum out-of-pocket that limits the financial risk for the consumer. In fact, of all your Medicare choices nothing comes close to the limit on your financial risk that you can achieve with a Medicare supplement. Unfortunately, I hear from people and have seen written that Medicare supplement do not have a maximum out-of-pocket. Where does the confusion come from? Believe it or not, it’s Medicare. It’s from very poorly communicated benefits directly from Medicare publications.
Medicare Supplement Benefit Table 2026
Here it is. The downloadable version of the table, as originated on the Medicare website, is the source of the confusion. The Medicare supplement benefit table. It’s the exact same table we used to find on the Medicare.gov website and in their publications, provided by private insurance companies .
The benefit table shows twelve different Medicare supplement plans. Ten across, then asterisks on the F and G to indicate those plans have a high deductible option. These Medicare supplement plans are offered by private insurance companies, and each insurance company may provide different plan options and coverage details.
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Footnotes & Legend
- ✓ Covered. ✕ Not covered. Percentages show how much the plan pays.
- * High-deductible versions may be available for Plans F and G.
- ** Out-of-pocket limits apply only to Plans K and L.
- *** Plan N pays Part B coinsurance except: up to $20 office visit & up to $50 ER if not admitted.
It’s Medicare’s Mistake
In studying this table you will quickly notice that both Plans K & L have this extra box titled “out-of-pocket limit”. But then, none of the other supplement plans show a row with the same title, including the absence of lifetime reserve days ?
Because of this failure in communications, it’s easy to assume that those Medigap plans must not have an annual maximum out-of-pocket. Right? That is certainly what most people assume, including many insurance agents that are supposed to know better.
You know what they say about assumptions. Of course.
But the blame here lies directly at the feet of Medicare for a poorly designed presentation and it’s the governments’ fault. The government doesn’t typically have ears for consumer feedback. I can also tell you from years of experience, many of the government publications are not written by industry experts. The federal government is responsible for setting the rules and benefit tables for Medicare plans offered by private insurers and insurance companies. , including maximum out-of-pocket costs and other standardized protections.
Let’s look at why these two Medigap plans, K and L show a maximum out-of-pocket designation where the other plans simply don’t need one.
Who Needs A Maximum Limit When The Plan Pays 100%
You might notice when you look closely at the table, most of the Medicare supplement Plans show 100% coverage for the major benefits.
For example, Medicare Part B coinsurance or copayment. That is the 20% that Medicare Part B does not cover. You have 100% coverage. Everything is paid for until you reach Plans K and L. Medigap Plan K has only 50% coverage. Medigap Plan L has only 75% coverage. These coinsurance and copayment amounts apply to a wide range of medical expenses and medical services, including doctor visits, outpatient care, durable medical equipment, and covered drugs.
Look at Part A hospital coinsurance. With no supplement you have 60-days of coverage before you start paying a daily copay. That copay is covered 100% by a Medicare supplement plan, except for Plans K & L. Plan K only covers 50%. Plan L covers 75%. Hospital costs, such as room and board, medications administered during your stay, and other inpatient services, are included in these expenses.
Skilled Nursing. Medicare Part A covers the first 20-days 100%, with the consumer paying a daily copay for days 21 through 100 totaling no more than $17,360. That’s the maximum for 2026. Skilled nursing facility costs, including daily care and rehabilitation services, are subject to these copays depending on your coverage.
If you have Medicare supplement Plan A or Plan B, you will pay whatever Medicare doesn’t pay, including skilled nursing facility costs. Which means if you spend 100-days in a skilled nursing facility you will pay up the maximum of $17,360. If you have any other supplements except supplement plans K and L, you have 100% coverage. 100-days of skilled nursing care cost you nothing out-of-pocket. Zero. ($0).
Plan K & L, The Only Partial Coverage Plans
So, the reason that Medicare supplement Plans K & L have a maximum out-of-pocket cost is because they only offer only partial coverage for major services. The consumer has a large financial exposure to medical bills because you do not have 100% coverage for these major services, which is where catastrophic coverage could alleviate some of that risk . Without a set maximum out-of-pocket limit for those two plans, the consumer would have unlimited financial exposure, which could result in an excessive financial burden.
Think of the annual maximum out-of-pocket costs as only referencing the benefits that are covered at either 50% or 75% by these two plans.
Another way to describe this is simply with a question. How can a consumer have any financial risk if the Medicare supplement is paying 100% of the Medicare bill?
So Many Professionals Got This Wrong!
With that covered, this next part is where it gets mind blowing. Hopefully, if my explanation of this is good, a light bulb will go off and it will all finally come together. Please let me know in the comment section below if the way I illustrate this made the light bulb go off or if I need to do more work on my explanations.
There are two pieces to this puzzle that you need to know for all of this to make sense.
Medicare Is Not Long-Term Care
First is that Medicare is not Long-term Care. Long-term care needs are not even considered on this benefit table
For example, your Skilled Nursing Care benefits end at 100-days. At 101-days of Skilled Nursing you have no Medicare benefits, and no Medicare supplement benefits. It doesn’t matter if these supplement plans have zero coverage for Skilled nursing like Plan A and Plan B or 100% coverage like Plans C, G and Plan N and so on, or just 50% and 75% coverage like Plans K and L. At day 101 your Medicare coverage is depleted. In addition, after you use your initial 90 days of inpatient hospital care, Medicare provides up to 60 additional ‘lifetime reserve days’ that can be used over your lifetime for extra hospital coverage—once these are used, you must pay all costs out of pocket. Medicare coverage is structured around ‘benefit periods’: a benefit period begins the day you are admitted as an inpatient to a hospital or skilled nursing facility and ends after you have been out for 60 consecutive days. Each benefit period resets the deductible and coinsurance requirements, and multiple benefit periods can occur within a year, which may increase your out-of-pocket costs for inpatient care.
A new benefit period begins after you have been out of the hospital or skilled nursing facility for 60 days, and each new benefit period resets certain costs and coverage terms. You are on your own unless you have Long-Term Care Insurance. That is where your Long-Term Care insurance policy will begin.
Does 100% Mean Everything?
Second, and this is key, the maximum out-of-pocket cost limit is only referencing what the Medicare supplement covers. Only costs for covered services are counted toward the out-of-pocket maximum, meaning that expenses for any covered service under the supplement plan, including those services that Medicare covers, are included, while non-covered services are not.
For example, the maximum out-of-pocket cost shown for Plan K is $8,000 for 2026. But that $8,000 is only applicable to what the supplement plan covers, excluding the annual deductible. It does not cover the Part B deductible. That’s an additional expense not included in the maximum out-of-pocket. It doesn’t cover Excess Charges. If you have Excess Charges they are in addition to the maximum out-of-pocket.
Now let’s apply that information to the Medicare supplements Plan A and Plan B. For the Medicare services that Plan A or Plan B cover, they cover at 100% of the Medicare bills not paid for by Original Medicare. The maximum out-of-pocket cost only references the portion of Medicare services covered by the supplement. There is no maximum annual out-of-pocket cost listed because for the benefits they cover, the cover at 100%. There is simply no supplemental insurance for Skilled Nursing.
That means you have a maximum out-of-pocket of zero for the benefits it covers. It just doesn’t cover as much as the other plans. There are inconvenient holes in the coverage.
Does that make sense?
Is There a Maximum out-of-pocket for Medicare Plan G?
The maximum out of pocket for Plan G is the Medicare Part B deductible ($283 for 2026). Medicare supplement Plan G covers all inpatient and outpatient Medicare expenses not paid for by Medicare. Coverage is based on the Medicare approved amount for each service, meaning Plan G pays costs that are Medicare approved after you meet your deductible. Medicare covers hospital stays, doctor visits, and other health services, while Plan G fills in the gaps for expenses not fully covered by Medicare. Your only expense is the annual Part B deductible. There is also no annual or lifetime cap on the benefits your receive.
Does Plan G Have a Deductible?
No, regular Plan G does not have a deductible. However, you must pay the annual Medicare Part B deductible, which is $283 for 2026, unless you have a plan through preferred provider organizations that may include coverage for prescription drugs. In addition, the b monthly premium is a separate, recurring cost for outpatient coverage and is not included in the out-of-pocket maximum. The high-deductible version of Plan G has a deductible of $2,950 for 2026. That is also its maximum out-of-pocket.
Considering what you now know, what is the maximum out-of-pocket for a Medicare supplement Plan G?
Well, we have to exclude Foreign Travel because Medicare itself does not cover any foreign travel emergency healthcare, as stipulated in the inflation reduction act . That is simply an extra benefit provided by the supplement.
Medicare supplement Plan G covers 100% of every Medicare service it covers. The only inpatient or outpatient Medicare service it does not cover is the annual Medicare Part B deductible. That is $283 for 2026. That’s it. If you have a Medicare supplement Plan G, your maximum out-of-pocket financial risk for 2026 is $283, which does not include any prescription drug coverage.
If you were to list a maximum out-of-pocket the way this table is designed, it would be zero. But considering real life, your maximum out-of-pocket will be the Medicare Part B deductible**.** This is a heck of a lot less than the financial exposure you have with Medicare supplement Plans K and L. In fact, it is the lowest maximum out-of-pocket financial risk a consumer can choose with Medicare.
Considering real life and not the limits of this table, let us look at the maximum out-of-pocket for the other popular Medicare supplements, including potential drug costs .
Medigap Plan N Out of Pocket Maximum
When a Medicare supplement does not cover the Part B Excess Charges, like Medigap Plan N and Medigap Plan D for example, we presume the consumer will avoid excess charges. It’s very easy to do. However, beneficiaries should be aware that they will still need to pay out of pocket for costs such as copays and deductibles. Please see my video on Best Medicare Supplement Plans for a detailed explanation of how easy it is.
Does Medicare Supplement Plan N Have a Deductible?
No, Plan N does not have a deductible. However, you will have to pay the annual Medicare Part B deductible which is $283 for 2026. The monthly premium is a separate, recurring cost that is not included in your out-of-pocket maximum.
Does Plan N Have Co-pays?
Yes. There is a $20 copay for office visits that involve diagnosis or evaluation. There is a $50 copay for emergency room visits that do not result in a hospital admission. These copays are part of the plan’s cost sharing structure, which determines how much you pay out-of-pocket for covered services. Urgent Care and Telehealth visits can be billed as an office visit. There is no copay for physical therapy or chemotherapy office visits.
Does Plan N Cover Excess Charges?
No. only Plan G and Plan F will pay Part B excess charges. However, excess charges are easy to avoid using Medicare’s online physician lookup tool.
When you receive medical services, Medicare pays its approved portion of the costs first, and you are responsible for the remaining expenses, such as the Part B deductible and any applicable copays. With the presumption that excess charges will be avoided, the Medicare Supplement Plan N maximum out-of-pocket will be the amount of the Medicare Part B deductible plus any of the copays you pay for office visits. There is a maximum of $20 for an office visit and a maximum of $50 for a hospital emergency room visit. For a detailed comparison of these costs and coverage options, see Medicare Supplement Plan N vs Plan G.
You may not have foreknowledge of the exact number of office visits you will have in a year, but for all practical purposes that cost, including part d cost sharing, will likely be less than the cost of the Part B deductible.
In case you were not aware, not all office visits qualify for the $20 copay. For details, please see my video on Best Medicare Supplement Plans linked below and above my left shoulder.
The maximum out-of-pocket limit for a Medicare supplement Plan N is among the lowest available in Medicare. For all practical purposes it will be a number less than twice the Medicare Part B deductible and certainly much, much lower than Medicare supplement Plans K and L.
Medigap High Deductible Plan G or Plan F Out of Pocket
What about the high-deductible Medicare supplements? That’s easy. The maximum out-of-pocket is equal to the deductible. That deductible is $2,950 for the year 2026. It increases each year with increases in the Consumer Price Index -U rounded to the nears $10 increment.
That $2,870 deductible is much a lower maximum out-of-pocket than Medicare supplement Plans K and L which are $8,000 and $4,000 respectively (2026). High-deductible plans have lower limits on out-of-pocket spending compared to some other plans, including those that involve out of network providers, and they may offer catastrophic coverage making them an attractive option for those seeking to minimize annual costs.
With this understanding of the benefit table design, which is often dictated by the federal government you should find it easy to define the maximum out-of-pocket limits for each of the supplement plans.
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