Medicare recipients buy Medigap policies to reduce their out-of-pocket costs. There is not a maximum for out-of-pocket costs for Medicare supplemental insurance plans, although many of them do have a deductible.
Most supplemental policies have co-pays for hospital care and Medicare Part B. They do not, however, pay for custodial care. Certain policies may have maximum out-of-pocket costs, but it is far more likely a Medicare supplemental insurance provider will expect patients to pay for minimum costs out of their own pocket.
Before Medicare Part D took over drug coverage from supplements, there was a limit on the maximum out-of-pocket expenses a person could pay for drug coverage on Medigap. The annual limit was $1,250 per year. When Medicare introduced Part D at the beginning of 2006, the drug coverage limits no longer applied.
Unfortunately, medical care is expensive and the costs are not going down. There are many reasons for the cost in coverage, but the increase in coverage means that private insurance companies will not easily submit to maximum out-of-pocket expenses for any Medigap plan. There may be a minimum out-of-pocket expense for Medigap policy holders, and this cost is usually the deductible.
It is possible in the future that the government will impose maximum out-of-pocket expenses on certain Medigap plans, as they did for prescription drugs in the past. At the moment, it does not exist. Even the Affordable Care Act did not change the rules that Medigap policy issuers must follow in this area.
It does not hurt for a person buying a Medigap policy to ask these questions because the rules about what companies can and cannot do change frequently. If there is a maximum out-of-pocket cost for your Medigap plan, the company will let the person know.