Right now, the buzz in the senior adult community is that Medicare has reduced annual out of pocket costs for Part D prescription drug plans, and has capped the maximum limit at $2,000 per year.
What does this mean, and what happens after out of pocket maximum is met?
What does OOP mean in insurance?
In the context of healthcare insurance payments, ‘reduced’, ‘capped’, and ‘limit’ all sound very exciting because who doesn’t want to pay less, especially in these times of crazy inflation?
But many people don’t quite know what out of pocket (OOP) costs are, and what ind oop on insurance cards means.
What are out of pocket costs?
Out-of-pocket costs include deductibles, coinsurance, and copayment. These are your share of expenses for only those services and procedures that are covered by your healthcare plan.
Note: Your plan’s monthly premium does NOT count toward your annual out of pocket maximum.
Whenever you make use of a covered service such as a regular doctor’s visit, certain specialist consultations, lab tests or X-rays, or buy equipment like a wheelchair or a blood glucose monitor, you must pay a portion of its cost yourself in the form of a deductible, copayment, or coinsurance.
After you’ve paid your share, your plan provider contributes toward the remainder until the entire service or product is fully paid off.
What is ind oop on insurance card?
You may have seen the abbreviation ‘IND OOP’ written either on the front or back of your health insurance card. This stands for Indemnity Out of Pocket and indicates the maximum amount payable by the person to whom the card has been issued.
How does out of pocket max work?
Let’s say the out of pocket maximum for your Medicare Advantage plan is $8,000 per year.
Every time you use a medical service covered by your plan provider, or purchase a piece of medical equipment covered by your plan provider, you will pay a deductible, copayment, or coinsurance. This is a small portion of a larger cost. You will keep paying these smaller portions until they accumulate to your maximum limit.
It doesn’t matter whether you reach your $8,000 maximum during the first few months of your coverage, or space it out over the year.
What happens after out of pocket maximum is met?
When you have spent $8,000 through deductibles, copayments, and coinsurance, any further expenses you incur will be paid in full by your plan provider.
Will I have to continue with copays after the OOP maximum is met?
It is possible that in certain situations you may still be making copayments even though you’ve reached your OOP maximum. To avoid overpaying, crosscheck all your doctor and pharmacy bills and receipts against your insurance provider’s claims statements. If there are any discrepancies, speak to your insurance provider.
Which Medicare plans offer out of pocket cost limits?
Most Medicare Advantage (Part C) plans have out of pocket maximums. These vary from $0 (no limit to what you may have to pay) to several thousand dollars.
Original Medicare (Part A and Part B) usually does not have an OOP.
From 2025, Part D will have an out of pocket cap of $2,000.
Several thousand? Isn’t it supposed to be capped at $2,000 only?
The $2,000 cap is for Part D prescription drug plans only and will come into effect from January 1, 2025.
This means that if you are enrolled in a Part D prescription drug plan, you will pay no more than $2,000, over the course of the whole year, for your prescription medications.
Once you have paid this amount, all further payments for prescription refills and any additional drugs your doctor prescribes will be made by your plan provider until the end of the year.
Reach out to us for information, answers, and guidance
For more help in understanding changes to Medicare plans for 2025, please speak to a staff member at any of our health center locations, or call our Patient Relations Team helpline at (800) 941-1106, from 8:00 am to 5:00 pm CST, Monday to Friday.