Does Medicare have an out-of-pocket limit? Well, the answer to this question depends on the type of Medicare plan you’re enrolled in. Original Medicare (Parts A and B) does not, but Medicare Advantage Plans (Part C) do. The Medicare Advantage Plan out-of-pocket limit for 2021 is $7,550 per year if you use in-network providers and $11,300 per year for in- and out-of-network costs.
What Can I Do to Reduce Costs?
If you opt for a Medicare Advantage plan, one of the best ways to reduce your out-of-pocket spending is to stay in your plan’s network. Granted, you will have the out-of-pocket spending limit with Medicare Advantage, but staying within your plan’s network (if it has one) will ultimately make your coverage cheaper than if you received your healthcare and services outside of the network.
If you choose to stay with Original Medicare, there is no specific provider network you have to receive your care from. However, suppose you’re looking to reduce your out-of-pocket costs. In that case, you can do so by adding on a Medicare Supplement (Medigap) plan. These plans will provide coverage for the out-of-pocket costs that Original Medicare won’t cover, which can include:
- Coinsurance and hospital costs
- Hospice care coinsurance and copayment
- Deductibles
- Excess charges
- Skilled nursing facility care coinsurance
- Foreign travel emergency care
- First three pints of blood in a transfusion
What About Prescription Drugs?
Although Parts A and B provide some coverage for some prescription drugs under limited circumstances, Medicare’s primary plan for paying for prescription drugs is the Part D plan. Part D plans cover most prescription drugs and average a cost of $31.47 in 2021. After meeting your deductible, you will pay copayments and cost-sharing until you hit the “donut hole” limit of $4,130. In the donut hole, you pay 25% of the cost of the drug until you hit the catastrophic coverage limit of $6,550 in 2021. After that, your costs are not capped but are very limited.
Learn More About Medicare with Eldridge Agency
At Eldridge Agency, we are committed to providing you with the information you need to make informed decisions about your Medicare costs and coverage. If you have any questions about your Medicare plan or want to learn more about other options, give us a call today.
