One of the least-discussed but most financially significant differences between Original Medicare and Medicare Advantage is the out-of-pocket maximum — or MOOP. For millions of beneficiaries, this number can mean the difference between a manageable health event and a financial crisis.
Original Medicare Has No MOOP
This surprises many people. Original Medicare (Parts A and B) has no annual cap on what you can owe out of pocket. Medicare generally covers 80% of Part B costs. You owe 20% — with no limit. If you're hospitalized for an extended period, you face daily coinsurance charges that escalate over time. There is no maximum.
For a serious illness or accident, Original Medicare costs can be devastating without supplemental coverage. This is precisely why Medigap policies exist: to cap or eliminate that 20% exposure.
Medicare Advantage Plans Have a MOOP — But It Varies
Every Medicare Advantage plan is required by law to set an annual out-of-pocket maximum for covered Part A and Part B services. In 2025, the maximum allowed MOOP is:
- $9,350 for in-network services
- $14,000 for combined in-network and out-of-network services (for PPO plans with OON benefits)
Once you reach your MOOP, the plan covers 100% of covered costs for the rest of the calendar year. The MOOP resets on January 1.
Not All MOOPs Are Created Equal
Plans are not required to set their MOOP at the maximum. Many plans set theirs significantly lower — $3,500, $4,500, $6,700. A lower MOOP provides stronger protection against catastrophic costs. When comparing Medicare Advantage plans, the MOOP number is one of the most important variables to evaluate alongside premium, network, and formulary.
What Counts Toward the MOOP?
The MOOP applies to your costs for covered Part A and Part B services — hospital stays, outpatient procedures, doctor visits, imaging, and similar. It generally does not include:
- Part D prescription drug costs (these are tracked separately)
- Out-of-network costs (for HMO plans that don't cover OON care)
- Extra benefits not covered under Part A or B (dental, vision, hearing)
- Your Part B premium
Medigap vs. MOOP: A Practical Comparison
A robust Medigap plan (like Plan G) essentially acts as an unlimited MOOP — it covers your 20% coinsurance after the Part B deductible with no cap. You pay higher monthly premiums, but your maximum annual exposure is predictable and limited.
A Medicare Advantage plan with a $4,000 MOOP may save you money most years through lower premiums, while still capping your exposure if something serious happens.
The right choice depends on your health, your financial cushion, and your risk tolerance. We help beneficiaries work through this analysis every day. Call us at (530) 395-5309.