There are many benefits to a Medicare Advantage plan over Original Medicare, some include the additional coverage option it offers, keeping out-of-pocket costs lower than what the individual would have paid outside of a Medicare Advantage plan, and you can choose to receive benefits through a private health plan. These additional Medicare Advantage coverage options can include dental, vision, hearing, fitness programs, as well as prescription drug coverage. In fact, most Advantage enrollees (90%) select plans that have prescription drug coverage. Although Medicare Advantage can be referred to as Medicare Part C, it is really its own plan with Original Medicare combined with additional coverage options.
What Variables Will Affect My Medicare Advantage Costs?
What you will pay as an enrollee can vary depending on the following:
- Your level of plan coverage
- Your income levels
- The state you live in
- Your budget as it relates to how much you are willing to pay for premiums, deductibles, copayments, and coinsurance.
Medicare Advantage premiums, deductibles, and coinsurances/copayments may change every year. Participants will get an Annual Notice of Change (ANOC) every fall notifying them of any changes.
What are the Premium Costs for Medicare Advantage?
The amount you pay may change annually and you must continue to pay your monthly Medicare Part B premium to stay in the plan. The monthly premiums are based on what Medicare Advantage plan you joined.
- Plan premiums may range from anywhere between $0 to $200 or more a month.
- The average Advantage premium is $19 per month in 2022.
What are the Deductible, Coinsurance/Copayment Costs for Medicare Advantage?
Due to the large variety of options, out-of-pocket cost statistics for deductibles, copayment, and coinsurance reported by the government may be limited. Regardless, the benefit to Medicare Advantage is that the plans have out-of-pocket maximums whereas Original Medicare does not. These out-of-pocket expenses may be customized to the enrollee’s budget considerations, and comfort level. For example:
- An enrollee could have a $5,000 annual out of pocket maximum (deductible). So, if the enrollee was unfortunate enough to incur $30,000 of surgery expenses in one year, they may only have to pay the $5,000 deductible.
- Other Advantage plans like Blue Cross Blue Shield can incorporate copays and coinsurance to work with a Medicare Advantage plan. So, in this scenario if the total bill for the surgery is $30,000 the enrollee pays a copay of $115 per day for the first 6 days in the hospital.
- If the enrollee stays in the hospital for 3 days, the enrollee will pay $345 the Advantage plan may pay for the rest of the hospital costs.
- Let’s consider if the enrollee needs crutches post operation. The coinsurance would pay 20% of the cost. If the crutches cost $40 the enrollee would pay $8 and the Advantage plan would pay the remainder.
Advantage plans will track costs for all costs (deductible, copays, and coinsurance) once the enrollee reaches the out-of-pocket maximum the Medicare Advantage Plan may pay for most of the covered services.
- Medicare Advantage in 2022, Kaiser Family Foundation.
- 2022 Premiums and Cost-Sharing Information for Medicare Advantage and Prescription Drug Plans, CMS.