Your maximum out-of-pocket limit (also known as a MOOP) is a super important part of your plan, especially if you have high annual medical bills from doctor visits and hospital stays. So how does it work, exactly? If you aren’t sure, you’re not alone—the MOOP is an insurance term that eludes many people, so let’s break it down.
Maximum out-of-pocket: the most money you’ll pay for covered health care in a calendar year, aside from any monthly premium. After reaching your MOOP, your insurance company pays for 100% of covered services.
The US government sets the standard Medicare Advantage maximum out-of-pocket limit every year. In 2019, this amount is $6,700, which is a common MOOP limit. However, you should note that some insurance companies use lower MOOP limits, while some plans may have higher limits.
How the MOOP limit works
One of the key differences between Original Medicare and Medicare Advantage is the MOOP limit. Medicare Advantage plans have a maximum out-of-pocket limit, while Original Medicare does not. This means if you have Original Medicare, there’s no limit to how much you can spend in a calendar year. If you have a Medicare Advantage plan and happen to have a lot of bills, you won’t have to pay for covered services once you’ve hit your limit.
Here’s an overview of what is and isn’t considered a part of your maximum out-of-pocket limit:
How a MOOP can save you money
So how exactly can having a maximum out-of-pocket limit save you money?
