Finding Low Cost Medicare Advantage Plans

Steven Mott by Steven Mott | Licensed since 2012
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This article was updated on: 08/29/2018

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Medicare Advantage is another way to get your Medicare Part A and Part B benefits through a private insurance company. Medicare Advantage plans may be attractive because they feature a yearly out-of-pocket limit. One the contrary, Original Medicare (Part A and Part B) has no cap on what you could spend out-of-pocket in a year. Medicare Advantage plans may also be appealing because they often offer extra benefits that Original Medicare generally doesn’t cover, such as prescription drugs, routine vision, hearing, and dental. Here’s what to consider when you’re shopping for a low cost Medicare Advantage plan.

Various costs of low cost Medicare Advantage plan

The first cost you may consider when looking for a low cost Medicare Advantage plan is the premium. The premium is the amount you pay monthly to have the plan regardless of which services you use. You can calculate your annual premium by multiplying your monthly premium by 12. For example, if your monthly premium is $55, your annual premium would be $660. Some Medicare Advantage plans have $0 monthly premiums.

A second cost you may consider when looking for a low cost Medicare Advantage plan are the deductibles. Some plans have medical deductibles and some plans have prescription drug deductibles. A deductible is the amount you pay before your plan begins to pay. Some Medicare Advantage plans have $0 deductibles.

A third cost to consider is your copayment or coinsurance. You may pay copayments for doctor visits, emergency room visits, ambulance services, outpatient surgery, urgently needed services, skilled nursing facility care, prescription drugs, and more. A copayment is a set dollar amount, like $15, and coinsurance is a percentage, like 20 percent.

A final cost you may consider when looking for a low cost Medicare Advantage plan is the out of pocket maximum. This matters more if you think you may reach this maximum. While the out-of-pocket limit is set by Medicare, it can vary by thousands of dollars from plan to plan.

Be sure to consider all these cost factors when determining what is the low cost Medicare Advantage plan you want. For example, consider this comparison of hypothetical Plan 1 and Plan 2

  Medicare Advantage Plan 1 Medicare Advantage Plan 2
Monthly Premium $0 $70
Out of Pocket Maximum $5,000 $3,000

 

If you go for Plan 1, you are saving $840 a year on premiums. However you’ll have all your covered costs paid for $2,000 sooner with Plan 2 than with Plan 1. If you reach the out-of-pocket maximum, Plan 2 is actually a lower cost plan, despite having a higher premium.

Other things to consider when looking for a low cost Medicare Advantage plan

When you have Medicare Advantage, you may have to pay the following premiums:

  • monthly premium to the company which you bought your Medicare Advantage plan from
  • Part B Premium
  • Medicare Part A premium (if you don’t qualify for premium-free Medicare Part A)

Medicare Advantage coverage:

  • All Medicare Advantage plans must cover at a minimum, what Original Medicare covers.
  • Some plans offer coverage beyond what Original Medicare covers.
  • Some plans offer the same benefits as Original Medicare and nothing additional.

For example, Original Medicare does not generally cover hearing aids. Some low cost Medicare Advantage plans may offer $0 for hearing aids and some plans may pay up to $1,000 every three years for hearing aids. If hearing aids are important to you, you should check if your plan covers them before enrolling in the plan.

Do you want to start looking for low cost Medicare Advantage plans in your area? Just enter your zip code on this page.

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