Medicare Advantage: out-of-pocket limits and prior authorization

A Medicare Advantage plan must cover all medically necessary services Original Medicare covers, but it sets its own costs and rules for getting care. Two rules matter most.

The yearly out-of-pocket limit

Every Medicare Advantage plan has a yearly limit on what you pay for covered Part A and Part B services. Once you reach it, you pay nothing for covered services for the rest of the calendar year. The limit varies by plan, and a plan may have a separate, higher limit for care outside its network.

• Premiums and drug costs don't count toward it. Drug costs have their own yearly cap.
• Original Medicare has no yearly limit unless you add coverage like Medigap.

Prior authorization

With Original Medicare, you rarely need approval before care. A Medicare Advantage plan may require approval, called prior authorization, before it covers certain services, supplies or drugs. HMO plans usually also need a referral before you see a specialist.

Since January 1, 2026, Medicare Advantage plans must:

• Decide urgent requests within 72 hours and standard requests within 7 calendar days.
• Give a specific reason when they deny a request for a service (this doesn't apply to drugs).
• Publish yearly numbers on their prior authorization decisions.

Starting in 2027, your plan may handle requests electronically and show decisions in your patient portal. Ask your doctor whether they use it.

Ask before you get care

You or your doctor can ask the plan in advance whether it covers a service and what you'll pay. This is called an organization determination. If the plan says no, you can appeal.

Emergencies and a few exceptions

• Emergency and urgent care are covered even outside the plan's network.
• Original Medicare still pays for hospice care and some clinical trial costs while you're in a Medicare Advantage plan.

Check every fall

Plan costs, limits and rules can change each year. Review your plan's changes before Open Enrollment (October 15 to December 7), and compare its limit and authorization rules with other plans on Medicare.gov's Plan Finder.