What Kind of Out of Pocket Costs do Medicare Advantage Plans Have?

Pamela Cannaday by Pamela Cannaday | Licensed since 2011
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This article was updated on: 10/06/2018

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Medicare Advantage plans are another way to get your Medicare Part A and Part B benefits from a private insurance company contracted with Medicare. Medicare Advantage plans must cover everything that Original Medicare (Part A and Part B) cover with the exception of hospice care, which is still covered by Part A.

Unlike Original Medicare, Medicare Advantage plans have out of pocket limits, capping what you spend yearly on covered medical services. Medicare Advantage plans may save you money overall but they also generally come with some out of pocket costs.

Medicare Advantage plans out of pocket costs include:

  • premiums,
  • deductibles
  • coinsurance/copayments

Medicare Advantage plans out of pocket cost: Premium

A premium is the amount you pay monthly or annually to have the plan, whether or not you receive services. Some Medicare Advantage plans have premiums as low as $0 but you must continue to pay your Medicare Part B premium. Keep in mind that plans with the lowest premiums may not necessarily be the cheapest plans as such plans may come with higher deductibles.

Medicare Advantage plans out of pocket cost: Deductibles

A deductible is the amount you must pay out of pocket for health care before your plan begins to pay. For example, if your deductible is $1,000, you could pay $1,000 out of pocket before you plan begins to cover your health care costs. Some Medicare Advantage plans have $0 annual deductibles.

Medicare Advantage plans out of pocket cost: Coinsurance/Copayment

Coinsurance and copayment is the amount you pay every time you see a doctor or use a service. Coinsurance is usually a percentage and a copayment is a set dollar amount. For example, you could pay a $15 copayment every time you visit the doctor.

How many out of pocket costs can I can expect to pay annually with a Medicare Advantage plan?

It depends on your plan, the medical services you receive, and how often you receive them. For example, you could have a plan with

·       a $600 annual premium

·       a $0 deductible

·        a $15 copayment for doctor visits,

·       and a $10 copay each for two prescription drugs you take.

In one year you

·       see the doctor twice,

·       refill your two prescriptions 12 times,

·       and get a flu shot.

 

You pay a total of

·       $600 for the premium

·       $30 for the doctor visits

·       $0 for the flu shot

·       $240 for the prescription drugs for a total of:

$870 plus your Part B premium

In another example, you have a plan with a

$0 annual premium

$0 annual deductible

$20 copayment for doctor visits

$30 copayment for one prescription drug you take and $15 copay for another prescription drug

 

In one year  you

·       See the doctor three times

·       Refill your two prescriptions 12 times

·       Get a screening mammogram

You pay a total of

·       $0 for the premium

·       $60 for the doctor visits

·       $0 for the screening mammogram

·       $540 for the prescription drugs for a total of

$600 plus your Part B premium

What other factors affect my out of pocket costs?

Other factors that could affect how much you pay out of pocket are:

  • Whether you go out of network to get care
  • Whether you need extra benefits
  • Whether your doctor accepts Medicare assignment if you do go out of network
  • Whether you have Medicaid or other financial help
  • What the plan’s yearly out of pocket limit is

Do you have more questions about Medicare Advantage plan costs?

You can get information via email, or schedule a telephone call, by clicking one of the links below. To see a list of plans in your area you may qualify for, click the “Compare plans” button on this page.

Benefits, premiums and/or copayments/co-insurance may change on January 1 of each year.
The Formulary, and/or provider network may change at any time. You will receive notice when necessary.

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