The Costs of Medicare Advantage

Learn more about the costs associated with Medicare Advantage plans, including Part A premiums, deductibles, copayments and coinsurance, and your maximum out-of-pocket cost.
The Costs of Medicare Advantage

Medicare Advantage Plans are offered by private organizations that have contracts with the Centers for Medicare and Medicaid Services (CMS) to deliver Medicare benefits to enrollees. Instead of the federal government, these plans cover Part A (hospital) and Part B (outpatient). Cost-sharing may be included in all Part C plans (copays, coinsurance, and deductibles). As a result, these plans must provide a maximum out-of-pocket payment. If the policyholder exceeds that limit during the course of a year, the insurance will cover 100 percent of health-care costs for the balance of the year.## Part A PremiumsYou are responsible for paying the Medicare Advantage plan's own premium in addition to your Part B cost. The typical Medicare Advantage premium in 2022 will be roughly $19 per month, according to CMS. However, your yearly deductible and copayments/coinsurance may be greater with certain plans that have no cost at all.Some Medicare Part C plans are "free," which means there is no monthly cost. Even if you have a zero-cost Medicare Advantage plan, you may still be required to pay the Part B premium.In general, you must pay:* Plan B premiums to Medicare: In 2022, the typical Plan B premium is $170.10.* Plan C premiums: A monthly payment to a private insurance company for your Medicare Advantage plan, though some programs do not have a premium.* Deductibles* Copayments and coinsuranceSome plans that do not require monthly payments may have higher cost-sharing. Other plans with higher monthly premiums may cover a greater portion of the costs when you receive services. If you plan to have ongoing care, paying a higher monthly premium may make sense if more of your per-service costs are covered.## DeductiblesAside from monthly payments, you should think about how much you're expected to spend on healthcare services.A deductible is an amount paid out of pocket by a beneficiary or insured person prior to the start of benefits. An annual deductible is only available in some Medicare Advantage plans. However, many Medicare Advantage plans that incorporate Part D/prescription drug coverage may have a separate deductible for medication coverage.## Copayments and CoinsuranceMedicare Advantage Plans often charge a copayment (copay) for doctor's visits and prescription drug refills. For example, you might spend $10 or $20 for a doctor's visit or prescription medicine.Remember that Medicare Advantage Plans are not allowed to charge higher copays than Original Medicare for some services, such as chemotherapy, dialysis, and skilled nursing facility care.Coinsurance amounts are any percentage of services you must pay for after your deductible is met. Coinsurance is typically expressed as a percentage (e.g., 20%).## Maximum Out-of-PocketA maximum out-of-pocket limit must be included in all plans. This means that the amount you spend out of pocket each year is limited, protecting you from excessive costs if you require extensive care or expensive services. These are often high limits that include copays and deductibles.Plans that let you visit out-of-network providers may have greater out-of-pocket limits. You will have a different out-of-pocket maximum for prescription drug expenses if your Medicare Advantage plan covers prescription drugs.## Plan TypesThe cost of your Medicare Part C plan may vary depending on the type of plan you select. For instance, seeing an out-of-network provider while enrolled in an HMO or PPO plan may result in higher charges.Many plans only pay for treatments when they are provided by doctors, facilities, and pharmacies that are part of the plan's network. Make sure your physicians are in the network and accepting new patients from the plan before enrolling in a Medicare Advantage Plan. The same goes for any other providers you might need in the future.---## Who can enroll in Medicare Advantage?You can enroll in a Medicare Advantage (Medicare Part C) plan as soon as you are eligible to sign up for Original Medicare. Prior to signing up for Medicare Advantage, you must first enroll in Original Medicare. You must also live in a plans service area and be a U.S citizen or lawfully present in the U.S.Read more: Who can enroll in Medicare Advantage?