By Susan Stewart, Licensed Insurance Agent
MOOP stands for Maximum Out of Pocket. As a licensed insurance agent, I’m required to quote it to my clients when I help them pick an insurance plan, but people often struggle to understand the concept.
MOOP is the maximum that you can pay out-of-pocket each year for your covered medical care expenses, and it’s strictly for medical expenses—not pharmacy, not dental. Think of your MOOP as a medical expense piggy bank. Every time you have a copay or co-insurance (which is when you pay a percentage of the care rather than a flat rate), that amount goes into the MOOP piggy bank. What’s included under this umbrella is broad: specialist copays, in-hospital copays, co-insurance for your durable medical equipment, and physical therapy. All of this goes into the MOOP piggy bank.
Now, here’s the important part. Once you fill your MOOP piggy bank by reaching the maximum, your plan will pay 100 percent of all covered costs. The most common way that beneficiaries misunderstand MOOPs is believing that their plan will stop paying at that point rather than starting to pay to 100 percent.
Which plans have the lowest MOOPs?
Generally speaking, your MOOP will be lower in an HMO than in other plans. This is because HMOs fully restrict you to their networks in exchange for a lower MOOP, lower copays, and higher benefits.
PPOs, on the other hand, usually have two MOOPS: your in-network MOOP and combined in-and-out-of-network MOOP, or your combined MOOP for short. For example, your in-network MOOP could be $7,000, and your combined MOOP could be $10,000. You can choose to go out of your network. However, it will not only cost more out-of-pocket, but your MOOP will also increase.
MOOPs vary from plan to plan, county to county, and state to state. That’s especially true if you’re choosing to step outside of your PPO network. That’s why it’s so important to understand the maximum out-of-pocket medical expenses you could incur in any given year when picking a plan.
Changes coming to MOOPs in 2025
In 2025, Medicare added a new MOOP and the program’s infamous “donut hole” is going away. This new MOOP is specifically for pharmacy benefits, is separate from your MOOP for medical expenses, and is capped at $2,000.
Whether you get your prescription drugs through a standalone Prescription Drug Plan or whether they’re included in your Medicare Advantage plan, when you spend $2,000 out of pocket on prescription drugs (including any required prescription deductibles), you immediately reach your plan’s catastrophic coverage phase. From there, all covered medications will be paid at 100 percent for the rest of the year. For beneficiaries who take more than one expensive medication, this can potentially save hundreds of dollars as opposed to hitting the donut hole and medication suddenly becoming unaffordable.
Another change that coincides with 2025’s new MOOP for prescription drugs is pharmacy deductibles. While there are still Medicare Advantage plans with $0 pharmacy deductibles, they are hard to find in 2025. Deductibles range from $200 to $590. Typically, deductibles are for tier three, four, and five medications. You pay the full cost for your medication until you meet your deductible, and then you move into initial coverage with your expected copays or co-insurance.
Of course, always remember that any premiums you pay—for a Medicare Advantage Plan or a standalone Prescription Drug Plan—will not apply to your MOOP. However, you can work through these questions with your licensed insurance agent. Listen for these details when getting quotes. Ask if you don’t understand or don’t hear them. Educate and empower yourself to be your own advocate.
