Original Medicare Has No Out-of-Pocket Maximum. In a Cancer Year, That 20% Can Become Almost Any Number.
Most people enrolling in Medicare never hear the detail that changes everything about a serious diagnosis. One percentage, applied to one bad year, can produce a number that surprises almost everyone who sees it for the first time.
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A 67-year-old retiree on Original Medicare, with no Medigap policy, receives a stage III colon cancer diagnosis in February. His oncologist orders months of infused chemotherapy, imaging, office visits, and follow-up scans billed under Part B. After the deductible, Medicare generally pays 80% of the approved amount. He owes the other 20%.
Original Medicare places no annual ceiling on that exposure. None. That is the detail many people do not hear clearly enough before declining a supplement.
The Mechanic: 20% of Whatever the Approved Amount Is
After the 2026 Part B deductible of $283, Original Medicare generally pays 80% of the Medicare-approved amount for physician services, outpatient treatment, and many drugs administered in a clinical setting. The beneficiary usually owes the remaining 20%, with no overall annual out-of-pocket maximum.
Not every Part B service carries 20% coinsurance, and certain drugs can receive lower cost-sharing when their prices rise faster than inflation. But the central exposure remains: Original Medicare alone has no yearly spending limit. In a healthy year, the cost can appear manageable beside the $202.90 standard monthly Part B premium. In a cancer year, the percentage becomes the budget.
Chemotherapy received in a doctor’s office, freestanding clinic, or hospital outpatient department generally falls under Part B. Across cancer types, modern infused drugs can carry Medicare-approved costs reaching well into six figures annually. If someone accumulates $150,000 in Part B services subject to 20% coinsurance, the patient share is $30,000. Imaging, radiation, and specialist visits can add to the exposure.
Not every colon cancer patient will face that bill. The treatment regimen and site of care determine the actual cost. The problem is that Original Medicare provides no ceiling preventing it. Part A brings separate costs. The 2026 inpatient deductible is $1,736 per benefit period, followed by $434 per day for days 61 through 90. A covered skilled nursing stay costs $217 per day for days 21 through 100, with Medicare coverage ending after day 100.
What Medigap Actually Does Here
Medigap Plan G covers the Part B coinsurance after the beneficiary meets the annual Part B deductible. Premiums vary by location, age, and carrier. In a healthy year, Plan G can feel expensive. In a cancer year, it can mark the difference between a $283 deductible and tens of thousands of dollars in coinsurance.
The trap is timing. The federal six-month Medigap Open Enrollment Period begins the first month someone is 65 or older and enrolled in Part B. Someone who delays Part B while covered by an active employer plan may start that window later.
During those six months, an insurer cannot reject an applicant or charge more because of health. Afterward, carriers in most states may use medical underwriting unless another guaranteed-issue right applies. Some states offer wider protections, while birthday and anniversary rules elsewhere generally help people who already have Medigap.
What Medicare Advantage Changes
Medicare Advantage plans have annual out-of-pocket limits for covered Part A and Part B services. That protection is real, but it comes with network and authorization rules. An HMO may provide no coverage for routine out-of-network treatment. A PPO may cover it with higher cost-sharing and a larger combined limit. Part D drug spending follows a separate benefit structure.
Before choosing a plan, confirm the oncologist, hospital, infusion center, and imaging facility. A hospital appearing in the directory does not guarantee that every specialist involved in treatment is covered on the same terms. Returning to Original Medicare during an eligible enrollment period is straightforward. Obtaining Medigap afterward may not be. The choice at 65 is not literally permanent, but a serious diagnosis can make it much harder to reverse.
What to Do Next
Three moves carry most of the weight:
- Use the federal Medigap window. Compare Plan G with high-deductible Plan G while coverage is guaranteed regardless of health.
- Check state protections. After the federal window closes, contact the state insurance department or SHIP before assuming Medigap is unavailable.
- Secure Medigap acceptance before leaving Medicare Advantage. Obtain written approval and coordinate the effective dates for Original Medicare, Medigap, and standalone Part D coverage before dropping the existing plan.
The threatening number is not always the premium on the first page of the plan comparison. For someone carrying Original Medicare alone, it is 20% of a medical bill with no annual stopping point.
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Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
