I’m on a Medicare Advantage plan. In your book, you recommend a Maximum Out Of Pocket (MOOP) no greater than $4,000. How am I able to tell whether or not my Medicare insurance company increased (or decreased) my Maximum Out Of Pocket (MOOP)?
Maximum Out of Pocket (MOOP) for Medicare
All Medicare Advantage plans have a Maximum Out Of Pocket (MOOP). Medicare Advantage plans contract with the federal government to offer their plans on an annual basis, and they all renew (or don’t) on January 1 of each year. That means new plans are born, others shut down, and exit (called a Plan Exit), and existing plans can change the benefits of their insurance policies once a year. The changes go into effect on January 1st and must remain the same through December 31st.
You’re right to want to check this every year, so follow that instinct! They change a lot. As the newest data from the Kaiser Family Foundation points out, 59% of all Medicare Advantage plans come with a $0 premium. If a Medicare Advantage insurance company is facing financial pressure on their Medicare Advantage plans and wants to keep the monthly premium at $0, one of the biggest (and easiest) levers they have is to increase the annual Maximum Out Of Pocket (MOOP).
Medicare Advantage insurance companies change their benefits for a whole host of reasons. Still, as you might suspect, they make their changes primarily to: increase or maintain profit margins, stem current or projected future losses, and respond to increased competition.
As I outline in my book, I’ve personally never seen a Medicare Advantage plan not change at least one benefit every year. You need to review the Annual Notification of Change (ANOC) document your Medicare insurance company sends you every September. There’s more on that below.
What is a Medicare MOOP (Maximum Out Of Pocket)?
A MOOP is a financial protection in Medicare terms should you have a bad health year accompanied by expensive medical bills. It limits how much money you’d have to pay out of your pocket.
Original Medicare A and B do not have a MOOP. That’s one of the significant Frustrating Flaws I point out in my book. Let’s say you get cancer. You’re in and out of the hospital; you’re seeing multiple doctors, undergoing chemotherapy, using expensive injectable drugs, and doing physical therapy over several months. I’ve seen many examples of cancer treatments running bills well over $1,000,000 in a few months.
There’s no cap if you are Bare with Medicare or only have Original Medicare A and B for your medical coverage. There’s no MOOP on how much you’d pay. This is probably the number one reason people should buy Medicare Supplements or Medicare Advantage Plans, in my opinion.
Medicare Advantage MOOPs (Maximum Out Of Pockets)
All Medicare all Medicare Advantage plans must have a MOOP for medical, and none have one higher than $7,550 in-network and $11,000 outside of the network (for PPO plans) annually in 2022. Medicare Part D benefits embedded into a Medicare Advantage plan do NOT count towards the MOOP. I recommend you shop for Medicare Advantage plans with the lowest monthly premium, no deductibles on medical or prescription drugs, and a MOOP at or under $4,000.
Review Your Annual Notification of Change (ANOC)
If you’re on a Medicare Advantage plan, there’s a relatively easy way of checking whether your MOOP increased, decreased, or remained the same. Your Medicare insurance company must send you an Annual Notification of Change (ANOC) by September 30 of each year. You’ll want to flip that open and go to the pages with a headline akin to the following: “Summary of Important Costs for 2022.”
Hannah, I hope that was helpful!
I love answering Medicare questions! Send me yours at https://prepareformedicare.com/contact/and I’ll pick a few for a future blog post!
To your wealth, wisdom, and wellness!
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Author Bio Matt Feret is the author of the Prepare for Medicare book series and launched prepareformedicare.com to help people get objective answers to questions about Medicare. Matt is also the host of The Matt Feret Show. He has held leadership roles at numerous Fortune 500 Medicare health insurers in sales, marketing, operations, product development, and strategy for over two decades.