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What You Pay in a Medicare Advantage Plan


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Summary: Medicare Advantage (Medicare Part C) is a way to get your Medicare benefits from a private, Medicare-approved insurance company. Your out-of-pocket costs with a Medicare Advantage plan might include a monthly premium, an annual deductible, and copayments or coinsurance for certain covered services. These costs will vary among plans.

According to the Centers for Medicare and Medicaid Services (CMS), your out-of-pocket costs will generally be lower in a Medicare Advantage plan than they would be with Original Medicare. Medicare Advantage plans also often provide benefits, such as prescription drug coverage, routine dental, routine vision, and routine hearing that Original Medicare generally doesn’t cover. A Medicare Advantage plan may be cost-effective for you, but you still generally have some out-of-pocket costs. Keep in mind that while some costs are regulated by Medicare, what you pay can vary from plan to plan. Here is what you may pay with a Medicare Advantage plan.

Medicare Advantage plan premiums

Some Medicare Advantage plans have monthly premiums that you must pay the private insurance company that administers your plan, whether or not you use covered services. If the monthly premium is $55, for example, you will pay $660 total annually for your Medicare Advantage premium.

You also must pay your Medicare Part B premium if you have a Medicare Advantage plan. The Part B premium is paid directly to Medicare and can change from year to year. If the standard Medicare Part B premium is $144.60, you will pay $1,735.20 annually for Medicare Part B. In some cases, you also might have a premium for Medicare Part A. Some Medicare Advantage plans have $0 monthly premiums. If you have a $0 premium, you may have a higher deductible or copayments, so be careful to consider all costs.

Medicare Advantage plan deductibles

A deductible is the amount you must pay out-of-pocket before your Medicare Advantage plan begins to pay for your covered health expenses. Some Medicare Advantage plans have separate deductibles for Medical coverage and prescription drugs. Some Medicare Advantage plans don’t have deductibles.

Medicare Advantage plans copayments and coinsurance

A copayment is a set dollar amount you pay when you visit a doctor or receive a service. Coinsurance is a percentage you pay when you see a doctor or receive a service, such as 20%. You may pay copayments of different amounts for:

  • Primary care doctor visits
  • Specialist office visits
  • Emergency room care
  • Ambulance services
  • Outpatient surgery
  • Inpatient hospital care
  • Skilled nursing facility care
  • Prescription drugs
  • Eyeglasses
  • Chiropractic coverage
  • Other services

Prescription drugs are often grouped into “tiers” with the lowest cost prescription drugs typically being on tier 1 and the highest cost prescription drugs being on tier 5. For example, you may pay a $0 copayment for tier 1 prescription drugs, a $15 copayment for tier 2 prescription drugs, an $80 copayment for tier 3 prescription drugs, and so on.

Copayments and coinsurance amounts vary from plan to plan.

Medicare Advantage plans out-of-pocket maximums

Unlike Original Medicare, all Medicare Advantage plans have out-of-pocket maximums. This means that after you reach your out-out-pocket maximum, all of your covered medical costs will be paid for the rest of the year.  Most out-of-pocket spending limits apply only to in-network providers. If you get care out of network, your payments may not count towards your out-of-pocket maximum.

Now that you understand more about what to pay for a Medicare Advantage plan, you might have a better idea what kind of plan to look for. Ready to find plans? Just enter your zip code on this page and start comparing our selection of Medicare Advantage plans.

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