If your doctor has told you that you need a hip or knee replacement and you're enrolled in a Medicare Advantage plan, you may be heading toward one of the most expensive surprises in American health insurance. The surgery itself is rarely where the financial damage happens. It's everything that follows — the skilled nursing facility stay, the home health visits, the outpatient physical therapy, the follow-up imaging — that can quietly stack up to thousands of dollars in bills that most retirees never saw coming when they signed up for a plan with a $0 monthly premium.
Joint replacement is among the most common surgical procedures performed on Americans over 65. More than 1 million total hip and knee replacements are performed annually in the United States, and the overwhelming majority of those patients are Medicare-eligible. That means a substantial share of the more than 33 million Americans currently enrolled in Medicare Advantage — a record high as of 2025, according to CMS.gov enrollment data — will face this exact situation at some point during their retirement. Understanding how the cost structure works before you schedule surgery is not optional. It is the difference between a manageable recovery and a financial crisis.
The core problem starts with how Medicare Advantage is allowed to structure your cost-sharing. Federal law requires Medicare Advantage plans to cover everything Original Medicare covers, but it gives plans wide latitude in how they charge you for that coverage. Under Original Medicare, a joint replacement hospitalization falls under Part A. After you meet the Part A deductible — $1,676 per benefit period in 2025 — you owe nothing for the first 60 days of an inpatient stay. Skilled nursing facility care following a qualifying hospital stay of at least three consecutive days is covered at $0 for days 1 through 20, then $209.50 per day for days 21 through 100 in 2025. That is a published, predictable cost structure. Medicare Advantage plans are not required to mirror it.
A typical Medicare Advantage SNF cost-sharing schedule might look like this: $0 for days 1 through 5, then $175 per day for days 6 through 20, then $300 or more per day for days 21 through 100. If your recovery requires 30 days in a skilled nursing facility — which is not unusual after a complicated hip replacement, particularly for patients managing diabetes, obesity, or cardiovascular disease — you could be looking at $2,625 to $4,500 or more just for the SNF portion of your care. That figure does not include cost-sharing for the hospital stay itself, post-discharge home health visits, or outpatient physical therapy sessions, each of which may carry its own copay or coinsurance under your specific plan.
The annual out-of-pocket maximum is supposed to function as your financial safety net. In 2025, Medicare Advantage plans are required to cap your in-network out-of-pocket costs at no more than $9,350 per year, and combined in-network and out-of-network costs at no more than $14,000. Once you reach that cap, your plan covers 100% of covered services for the remainder of the calendar year. That sounds like meaningful protection — until you understand two critical limitations. First, not every cost-sharing category necessarily counts toward the cap in every plan. Some plans exclude certain services from the cap calculation, so reading your full Evidence of Coverage document, not just the Summary of Benefits, is essential. Second, and more consequentially, the cap resets to zero on January 1 of every year.
Timing a surgery poorly can mean hitting your out-of-pocket maximum in the fall and then immediately beginning to accumulate new costs against a fresh cap in January. A 30-day SNF stay that straddles December 31 and January 1 means you are paying cost-sharing under two separate plan years simultaneously. This is not a theoretical edge case invented to frighten people. It happens every winter to real Medicare Advantage enrollees who scheduled elective joint replacements in October or November without understanding how the calendar interacts with their cost exposure. If your surgeon gives you flexibility on timing, scheduling a joint replacement in January or February rather than the fall gives you the entire calendar year to accumulate costs against a single cap.
Prior authorization adds a second layer of risk that Original Medicare simply does not impose. Medicare Advantage plans are permitted to require prior authorization before approving a skilled nursing facility admission, home health services, or certain types of physical therapy. A 2022 report from the HHS Office of Inspector General examined Medicare Advantage prior authorization practices and found that plans denied 13% of prior authorization requests for services that would have been covered under Original Medicare — and that 75% of those denials were later overturned on appeal. That means the original denial was wrong in the majority of cases, but the patient had to fight to correct it. After a joint replacement, when you are in pain, fatigued, and trying to focus on physical therapy, navigating an insurance appeal is an enormous burden. Knowing your rights before surgery — and having a family member or advocate ready to help — can make a significant difference.
Data Snapshot: According to CMS.gov data, there were 3,959 Medicare Advantage plans available nationwide for the 2025 plan year, with an average monthly premium of approximately $17 for plans that include prescription drug coverage. While that low premium figure drives enrollment, the variation in SNF cost-sharing schedules, prior authorization requirements, and out-of-pocket maximums across those nearly 4,000 plans is enormous. Two plans in the same county from the same insurer can have meaningfully different SNF daily copays — and that difference becomes financially decisive the moment you need post-acute care after a major surgery.
If you have not yet had surgery and you are currently in the Annual Enrollment Period — which runs October 15 through December 7 each year — you have a genuine opportunity to act. You can switch to a different Medicare Advantage plan with more favorable SNF cost-sharing, or you can leave Medicare Advantage entirely and return to Original Medicare paired with a Medigap supplemental policy. Medigap Plan G, the most widely purchased plan among new enrollees in recent years, covers your Part A deductible, your SNF coinsurance for days 21 through 100, and your Part B excess charges. Under Plan G, your out-of-pocket exposure for a joint replacement and a 30-day SNF stay could be limited to the Plan G monthly premium plus the Part B deductible, which is $257 in 2025. Plan N offers similar coverage at a lower monthly premium but adds copays of up to $20 for some office visits and does not cover Part B excess charges, making it a reasonable option for people who are generally healthy between major procedures.
The significant obstacle with Medigap is medical underwriting. In most states, if you are switching from Medicare Advantage to Original Medicare outside of a guaranteed issue window, insurers can review your health history and either charge you higher premiums or deny you coverage based on pre-existing conditions. Joint problems, diabetes, and heart disease — exactly the conditions that make joint replacement more likely — are also the conditions that can make Medigap harder to obtain. However, if you live in one of the states with a birthday rule, your options are meaningfully better. California, Idaho, Illinois, Kentucky, Louisiana, Maine, Maryland, Missouri, Nevada, New Jersey, New York, Oklahoma, and Oregon all provide a 30-day window around your birthday each year to switch Medigap plans without medical underwriting. New York and Connecticut go further still, requiring guaranteed issue for Medigap policies year-round regardless of health status. If you are in one of these states and approaching a birthday, that window may be the most valuable enrollment opportunity available to you.
For people who are already post-surgery and facing unexpected bills, the immediate priority is to request an itemized bill from every provider — the hospital, the SNF, the home health agency, the physical therapy practice — and compare each line item against the Explanation of Benefits your Medicare Advantage plan sends you. Billing errors in post-acute care settings are common, and a single miscoded procedure can generate a bill you do not actually owe. If you believe a service was incorrectly denied or that your cost-sharing was applied incorrectly, you have the right to file a formal appeal. Your plan is required by law to provide written notice of any denial and clear instructions for how to appeal. Given the OIG finding that 75% of appealed denials are overturned, filing an appeal is almost always worth the time. Your State Health Insurance Assistance Program counselor can guide you through the process at no cost — find your local SHIP office at shiphelp.org.
If your joint replacement is more than a year away, use that time deliberately. Ask your orthopedic surgeon for a realistic recovery timeline and a candid assessment of whether a skilled nursing facility stay is likely given your overall health. Then pull your plan's full Evidence of Coverage document — available through your plan or at Medicare.gov — and locate the SNF cost-sharing table, the home health benefit section, and the prior authorization requirements. Map out your realistic total cost exposure under two or three different recovery scenarios. Then use the Medicare Plan Finder at Medicare.gov to compare alternative plans in your area on SNF cost-sharing specifically, not just the monthly premium. The premium is the number that gets advertised in every television commercial. The SNF daily copay is the number that can determine whether your retirement savings absorb a serious, lasting hit. Knowing the difference before you schedule surgery is the single most valuable financial decision you can make.