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What You Pay in a Medicare Advantage Plan

William Echols by William Echols | Licensed since 2011
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This article was updated on: 08/03/2015

Medicare Advantage plans frequently offer more benefits than Original Medicare and may have lower out-of-pocket costs. Your health insurance rate and out-of-pocket costs will depend on the particular Medicare Advantage plan you choose. Some plans charge monthly premiums, and many plans have an annual deductible. Other costs may include copayments for each doctor or hospital visit, and premiums for optional benefits, such as vision, hearing, and/or dental coverage.

Medicare Part B and Medicare Advantage premiums
Even if you enroll in a Medicare Advantage plan, you are still required to pay your monthly premium for Medicare Part B coverage. Medicare Part B premiums must be paid directly to Medicare. The monthly cost may increase based on your annual household income from two years prior.

In addition to the Medicare Part B premium, Medicare Advantage plans often charge a monthly premium for coverage. You may even find $0 premium Medicare Advantage plans; however, in these plans, you may be responsible for higher cost sharing. A detailed comparison of the Medicare plan options available in your service area will help you control your overall Medicare costs.

Medicare Advantage annual deductibles
Health insurance rates are often based partly on each health plan’s annual deductible. Some Medicare Advantage plans require you to meet an annual deductible before your coinsurance takes effect. These deductibles vary by plan, with higher annual deductibles often meaning lower monthly plan premiums.

If you are worried about your Medicare costs, you may consider whether a Medicare Advantage plan with a higher monthly premium or one with a higher annual deductible will save you the most money. Typically, if you are ill or fall sick often, a plan with a higher monthly premium and a lower annual deductible may be able to save you the most money in the long run. You should also pay attention to the plan’s Maximum Out-of-Pocket (MOOP) amount. This is the maximum you’ll spend out of pocket for covered services in a given year. Once you reach this spending limit, the Medicare Advantage plan typically covers 100% of the cost, so enrolling in a plan with a low MOOP limit could be another way to lower your Medicare costs.

Copayments in Medicare Advantage plans
Medicare Advantage copayments can vary drastically between plans. Some plans charge copayments for doctors’ visits, hospital stays, ambulance rides, and/or visits to the emergency room. Copayments are sometimes structured on a two- or three-tier system; for example, visits to your primary care physician may have lower copayments than a visit to a specialist. Emergency care copayments, if applicable, are often the most expensive. The Summary of Benefits provides a detailed review of the Medicare Advantage plan and will explain your plan’s particular copayments structure.

Prescription costs in Medicare Advantage Prescription Drug plans
Medicare Advantage plans that include prescription drug coverage will have a formulary, which is a list of covered prescriptions. The formulary places prescriptions into tiers, with generic prescriptions generally located in the lowest one. The lowest-tiered prescriptions are typically cheaper than the drugs located in the higher tiers.

Medicare Advantage plan spending limits
Another aspect that affects your health insurance rates and how much you pay for services under a Medicare Advantage plan is each plan’s Maximum Out-Of-Pocket (MOOP) limit. The MOOP refers to the maximum amount of money you can pay out-of-pocket each year for health-care services, and this amount can vary between plans.

It is important to note that most annual out-of-pocket spending limits apply only to in-network Medicare providers. If you choose to go out-of-network for services, you may either be subject to a higher out-of-network MOOP limit or your payments may not be figured into your annual expenditures at all.

I can help you understand the out-of-pocket expenses you could pay, based on your needs and Medicare plan choices. To learn more about my background as a licensed insurance agent and why I enjoy helping people get answers, see my profile using the “View profile” link below. When you feel ready, reach out to me for a phone discussion or an email containing Medicare Advantage plans that could work for you; the links for those are below too. To take a look at plans right away, use the Compare Plans buttons on this page. If you have more specific questions or would like help selecting a plan, call me or another licensed insurance agent.

Call Medicare.com’s licensed insurance agents at 1-844-847-2659, TTY users 711; Monday through Friday, 8AM to 8PM ET.

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William Echols |
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Licensed Insurance Agent since 2011
1- 844-847-2659
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