Understanding maximum-out-of-pocket (aka the MOOP)

August 22, 2022
money and medication

When it comes to healthcare, you may be responsible for out-of-pocket costs, known as health or prescription drug costs that you must pay because Medicare or other insurance doesn’t cover them, or because you have a cost-share for that service. MOOP is an acronym standing for maximum out-of-pocket costs. The MOOP is the limit on annual out-of-pocket expenses that you’ll pay for medical services that are covered by your Medicare plan. After you reach the MOOP, you won’t pay any additional cost-sharing for medical services until the next plan year. We know that understanding MOOP is important, but we also know that it can be confusing. Here are some answers to a commonly asked questions, including how having a Medicare Advantage (MA) plan with a MOOP can save you money.

1. Does Original Medicare have a MOOP?

Did you know that Original Medicare (Parts A and B) doesn’t have a MOOP? If you are hospitalized several times during the year, have a chronic condition like diabetes and/or have a lot of medical expenses, you may end up paying a lot of money each year. This is because there are costs associated with Original Medicare including:

  • Your Part A and Part B deductibles
  • Your Part B premium
  • Your 20 percent Part B coinsurance
  • Any Part A coinsurance for extended (over 60 days or 90 days) inpatient hospital stays

So, without a maximum limit on your yearly out-of-pocket costs, you won’t be protected from excessive costs if you need a lot of care or expensive treatments.

2. Do Medicare Supplement (MedSupp, Medigap) plans have a MOOP?

MedSupp insurance plans work alongside your Original Medicare coverage, and these policies are labeled Plans A, B, C, D, F, G, K, L, M and N, and their coverage is standardized. Some, but not all, MedSupp plans have a MOOP – only Medicare Supplement Plans K and L include annual out-of-pocket limits. These limits are set annually by the Centers for Medicare and Medicaid Services (CMS).

3. Do Medicare Advantage plans have maximum out-of-pocket limits?

MA plans are offered by private, Medicare-approved insurance companies, and all MA plans have a MOOP. Each year, CMS sets a limit for all plans, meaning that a plan cannot set its limit higher than that amount, but it can set a limit for lower. Once your covered medical expenses meet your MOOP, the plan will pay 100 percent of your covered medical costs for the rest of the plan year. Make sure that you check with the plan that you’re interested in to confirm the limit they set.

4. Which expenses count toward your MOOP?

It’s important to understand how a MOOP works. We’ll try to keep it simple by explaining which expenses count toward your MOOP and which expenses don’t. The following expenses count towards your MOOP:

  • Coinsurance for durable medical equipment, healthcare services and x-rays
  • Copays and deductibles for doctors’ visits, emergency room visits, hospital stays, outpatient visits and specialists
  • Covered services from in-network healthcare providers

The following expenses don’t count towards your MOOP:

  • Your monthly premium
  • Prescription drug costs
  • Any services from out-of-network healthcare providers unless the care is authorized by your plan

If you want more specific details about your plan’s MOOP, look at your Summary of Benefits. Aspire Health Medicare Advantage plan members can also contact Member Services with any questions.

5. What is the most I would pay in a year on a Medicare Advantage plan?

Having an MA plan with a MOOP can save you money. How? Any copays towards visits to your primary care provider or specialists go toward your MOOP, in addition to any hospital stays, services there, surgeries and/or follow-up treatments. Unfortunately, these costs can add up!

Watch this video below to hear more from William Tienken, health plan advisor, as he explains the term “MOOP” and how Medicare Advantage plans all have a maximum out-of-pocket limit for yearly medical expenses. This helps create a financial safety net for Medicare beneficiaries who are frequently hospitalized, have a lot of medical expenses or chronic condition(s).

Aspire Health offers Monterey County’s only Medicare Advantage plans. If you have any questions about MOOP or our plans in general, please give us a call at (866) 798-1530. TTY users can call 711.

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