Original Medicare Covers 80% of Your Doctor Bills - the Other 20% Has No Limit

Imagine a retiree receives a serious diagnosis and accumulates $200,000 in Medicare-approved Part B charges over several months. This is a hypothetical example, but the math is real: Without supplemental cpoverage, that person could be responsible for roughly $40,000.

Original Medicare generally pays 80% of approved Part B costs after the deductible. The patient pays the other 20%, and there is no annual limit on how high that share could climb. Understanding this gap is one of the most important ways retirees can avoid money mistakes when choosing Medicare coverage.

Here is how the risk works, and the two main ways to contain it.

Original Medicare does not have an annual spending cap

Most people are used to health insurance plans that stop charging copays and coinsurance once the member reaches an annual out-of-pocket maximum.

However, Original Medicare works differently. It does not place a yearly ceiling on what beneficiaries might pay for covered Part A and Part B services unless they have additional coverage, like Medigap or Medicaid.

That makes a major illness potentially cost thousands of dollars.

The 20% coinsurance applies after the Part B deductible

In 2026, the Medicare Part B deductible is $283. Once a beneficiary meets that, Medicare generally pays 80% of the Medicare-approved amount for covered services, while the beneficiary pays 20%.

Part B covers more than routine doctor visits. It can also include outpatient treatment, physician services, durable medical equipment, diagnostic testing, certain medications, and chemotherapy.

Twenty percent can become a five-figure bill

In an uneventful year, Part B coinsurance might amount to only a few hundred dollars. But the percentage does not shrink when care becomes more expensive.

Using the hypothetical $200,000 in Medicare-approved Part B charges, the patient's 20% share would be approximately $40,000, plus the deductible. Actual costs would depend on which services Medicare covers, the approved amounts, and whether the providers accept Medicare assignment.

The point is not that every retiree will face such a bill. It is that Original Medicare does not prevent one.

Medigap Part B turns the risk into a monthly premium

Medicare Supplement Insurance, commonly called Medigap, is private coverage designed to pay some of the costs left behind by Original Medicare.

Part B covers the Plan B coinsurance and most other remaining Original Medicare cost-sharing once the beneficiary pays the annual Part B deductible. It does not cover the Part B deductible itself.

Part B premiums depend heavily on the applicant

A Part B premium might fall around $150 to $250 per month, although the price can vary widely depending on the location, age, sex, tobacco use, insurer, available discounts, and the specific company.

At $220 per month, premiums would total approximately $2,640 per year. That is not a small expense, and premiums can rise over time. However, it replaces much of the unpredictable Part B cost exposure with a bill that can be included in a retirement budget.

Medicare Advantage provides a different kind of protection

Medicare Advantage replaces Original Medicare as the primary way the beneficiary receives Medicare-covered services. Many plans advertise a $0 additional premium, although members must continue paying their Part B premium and may face deductibles, copays, or coinsurance.

Unlike Original Medicare, Medicare Advantage plans must impose an annual out-of-pocket limit for covered Part A and Part B services.

In 2026, the limit cannot exceed $9,250 for in-network care or $13,900 for combined in- and out-of-network care. Plans may set lower limits.

The Medicare Advantage cap comes with tradeoffs

The out-of-pocket limit gives Medicare Advantage members protection that Original Medicare alone does not provide. But the cap is not the same as receiving nearly complete supplemental coverage.

Members may still end up owing thousands of dollars through copays and coinsurance before reaching their plan's limit. Prescription costs, premiums, and noncovered services generally do not count toward the Part A and Part B maximums.

Plans may also use provider networks, referrals, and prior authorization requirements. Someone comparing plans should check whether preferred doctors, hospitals, specialists, and medications are covered.

Switching back later might not be simple

A person can leave Medicare Advantage and return to Original Medicare during certain enrollment periods. The harder part may be obtaining an affordable Medigap policy afterward.

Federal law provides a one-time, six-month Medigap open enrollment period beginning when someone is 65 or older and enrolled in Part B. During that window, insurers cannot deny a policy or charge more because of existing health problems.

After that, insurers in most states may use medical underwriting unless the applicant has a guaranteed-issue right.

Some beneficiaries have additional protections

The switch-back problem is not absolute, though. Federal trial rights and other guaranteed-issue protections may apply in limited situations, such as when a Medicare Advantage plan leaves an area.

Some states also provide broader Medigap enrollment rights than federal law requires. Beneficiaries should check with their State Health Insurance Assistance Program or state insurance department before assuming they can (or cannot) qualify.

Get quotes before the decision becomes harder

Anyone currently in the six-month Medigap open enrollment window should consider requesting Part B quotes now, even if Medicare Advantage initially looks less expensive.

People who already have Original Medicare without a supplement can still apply for Medigap. Medical underwriting might affect approval or price, but requesting a quote does not commit the applicant to buying a policy.

Bottom line

Original Medicare's 20% Part B coinsurance can look manageable until a serious illness sends approved charges sharply higher. Medigap and Medicare Advantage both limit that risk in different ways, so retirees should compare premiums, provider access, and potential out-of-pocket costs before choosing coverage.

One useful step is to compare each option based on a bad medical year, not just a healthy one. When retirement savings are stretched thin, a slightly higher predictable premium may be easier to absorb than an unexpected five-figure bill.

You May Also Like

23 Ways To Get Money Without Getting A Second Job

By FinanceBuzz Editors

How To Save Money on Car Insurance: 12 Ways to Lower Rates

By Elyssa Kirkham

10 Things Seniors Born Between 1941-1969 Could Take Advantage Of

By FinanceBuzz Editors

19 Dumbest Things Smart People Waste Money On

By Team FBZ

7 Moves If You Want to Stop Living Paycheck to Paycheck

By FinanceBuzz Editors

7 Clever Ways to Crush Your Debt

By FinanceBuzz Editors

Save Money and Get Huge Discounts on Everyday Purchases

AARP Benefits

• Huge discounts on travel, groceries, prescriptions and more
• Access to financial planning resources and health tools
• Join AARP and get 25% off with automatic renewal

Become a member now!

---

Subscribe Today

Learn how to make an extra $200

Get vetted side hustles and proven ways to earn extra cash sent to your inbox.

or

Subscribe Now →

By submitting this form you agree to receive emails from FinanceBuzz and to the privacy policy and terms