Original Medicare Has No Out-of-Pocket Cap. Here’s What That Costs You.

Barbara enrolled in Original Medicare at 65, believing it worked like her old employer plan. There would be a cap, and things would max out eventually. Then a stroke put her in the hospital and a skilled nursing facility for almost four months, and she came home to $34,000 in out-of-pocket costs Medicare didn’t cover.

Barbara had a stroke at 67. She spent 14 days as an inpatient, then transferred to a skilled nursing facility for rehabilitation. Under Part A, she owed the $1,736 inpatient deductible. Days 1 through 20 at the skilled nursing facility were covered in full. Days 21 through 100 carried a $217-per-day coinsurance charge; 80 of those days at $217 totaled $17,360 in coinsurance alone. Her specialist visits and ongoing rehabilitation generated Part B charges at 20% coinsurance per service, with no cap on the total. She opened each bill expecting a cap to kick in. There was no cap. Her total out-of-pocket for that one illness episode: $34,000. She had declined a Medicare Supplement plan at enrollment because the $180-per-month premium felt unnecessary.

What “No Out-of-Pocket Maximum” Actually Means

Every major category of American health insurance has a mandatory annual out-of-pocket limit. The ACA requires it for marketplace plans. Employer-sponsored health plans are required to cap cost-sharing for essential health benefits. Medicare Advantage plans are required by CMS to have an annual out-of-pocket maximum, currently set at $9,250 for in-network services in 2026. Original Medicare, Parts A and B, has no such requirement or cap. Congress has never mandated one.

This means that if you have a serious illness in a given year, your cost-sharing obligations under Original Medicare can grow without a ceiling. Every Part B service generates a 20% coinsurance charge. Every inpatient stay generates a deductible. Extended stays in skilled nursing facilities generate daily coinsurance from day 21 onward. None of these amounts count toward a cap, because there is no cap to count toward.

How Medicare Part A Actually Charges You

The Part A inpatient deductible in 2026 is $1,736 per benefit period. A benefit period begins the day you’re admitted to a hospital or skilled nursing facility as an inpatient and ends when you’ve been out of the hospital or SNF for 60 consecutive days. This is not an annual deductible. If you’re discharged, recover at home for 60 days, and are then readmitted, you owe the full deductible again. A patient with multiple hospitalizations in a single year can pay the Part A deductible three or four times.

From days 61 to 90 of a single inpatient stay, Part A charges a daily coinsurance amount of $434 in 2026. From day 91 onward, Medicare provides 60 lifetime reserve days at $868 per day, and once those are exhausted, Medicare pays nothing further for that stay. At a skilled nursing facility, the daily coinsurance of $217 runs from days 21 through 100. After day 100, Medicare ends entirely. There is no coverage for custodial nursing home care under any part of Original Medicare. Most families only learn this during the crisis.

The Part B Gap Most People Miss

Part B covers physician services, outpatient care, and most preventive services, but it applies a 20% coinsurance to every covered service after the annual deductible ($283 in 2026). That 20% sounds manageable until the underlying bill is large. A chemotherapy regimen, a cardiac procedure, or a course of specialty medications can generate $40,000 or more in Part B coinsurance in a single year. There is no mechanism in Original Medicare that stops the 20% obligation from accumulating.

For most employer-sponsored plans, cost-sharing stops accumulating when you hit the out-of-pocket maximum. Under Original Medicare, every new service generates a new charge.

The Two Ways to Cap Your Exposure

Medicare Supplement plans, also called Medigap, are private insurance policies sold alongside Original Medicare that cover most or all of the cost-sharing Medicare leaves behind. The most popular plan designs pay the Part A deductible, the SNF coinsurance, and the Part B 20% coinsurance in full, effectively creating a no-cost-share structure. Monthly premiums vary by age, location, tobacco use, and plan design, but range from roughly $120 to $350 per month for a 65-year-old in most markets.

Medicare Advantage (Part C) replaces Original Medicare entirely with a private plan that bundles Parts A, B, and usually D into a single product. These plans are required to cap annual out-of-pocket costs. Premiums for many Medicare Advantage plans range from $0 to $50 per month, which makes them attractive compared to Medigap, but the out-of-pocket maximum on MA plans can reach $9,250 for in-network care in 2026, meaning the exposure, while capped, remains meaningful.

The Enrollment Window That Closes Once

Medigap plans are medically underwritten outside of specific enrollment windows in most states. When you first enroll in Medicare Part B at 65 or older, you have a one-time six-month Open Enrollment period during which any Medigap insurer must sell you any plan at the standard rate with no medical underwriting. You cannot be turned down or charged more because of your health history.

That window opens once and does not reopen. If you decline a Medigap plan during Open Enrollment and later try to buy one after a major illness, insurers in most states can reject your application or charge substantially higher premiums based on your health history. Barbara’s $180-per-month Medigap window was open at 65. By 67, when her stroke had made her newly motivated to close the coverage gap, that window was gone.

For more on the basic structure of what Medicare covers, see What Does Medicare Cover: A Simple Guide for Beginners. To understand how Medigap and Medicare Advantage compare as solutions to this gap, see the breakdown of Medicare Advantage vs. Medicare Supplement key differences.

Questions to Ask Before You Finalize Your Medicare Enrollment

• Am I enrolling in Original Medicare only, and if so, what is my maximum potential out-of-pocket exposure in a serious illness year?
• When does my Medigap Open Enrollment window open, and how long does it last?
• What Medigap plan designs are available in my state, and which covers both the Part A deductible and Part B coinsurance?
• If I choose Medicare Advantage instead, what is the plan’s annual out-of-pocket maximum for in-network and out-of-network care?
• Does my state have protections that allow me to switch from Medicare Advantage back to Original Medicare while maintaining guaranteed access to Medigap?

Barbara’s $34,000 out-of-pocket cost resulted from a single episode of illness with a good outcome. She came home and recovered. A longer or more complicated illness would have generated more. The decision between Original Medicare alone, Medigap, and Medicare Advantage is worth getting right the first time, because getting it wrong a second time isn’t always possible.