Medicare Advantage plans are Medicare plans offered by private insurers. Anyone who has Medicare Parts A and B can choose a Medicare Advantage Plan instead. When comparing plans, premiums are one of the key factors to consider, along with the summary of benefits, and other costs of the plan.
Medicare Advantage plans offer Medicare coverage through private insurance companies. Though it is referred to as Medicare Part C, you can think of it as a bundled coverage that includes Part A and B, and in some cases, D (prescription drug coverage) as well.
For some people, Medicare Advantage plans may cost less and/or offer a wider range of benefits than Original Medicare.
Premiums vary by insurance company and where you live, however, so you should plan to compare plans carefully before you enroll, as well as review your options each year during the open enrollment period.
Medicare Advantage premiums are the amount you are responsible to pay each month for your health care coverage. “In order to carry a Medicare Advantage plan, you have to have a premium,” says Ryan Watts, who leads Choice Health Insurance at Alight.
That said, expect that most Medicare Advantage premium prices will be in the ballpark of $20 to $45, says Watts.
Your Medicare Advantage premium is in addition to the Part B premium that everyone has to pay. For some areas, there may be Medicare Advantage Plans that offer a Part B Giveback, however, meaning that you’ll get back some of the Part B premium credited to your social security check, says Watts.
Depending on the plan, the Medicare Advantage premium might also bundle in Part D prescription drug coverage, which you would otherwise have to pay separately for.
There is a tool you can use right on the Medicare website called the Medicare Plan Finder that lets you compare plans and premiums based on your zip code, says Watts. “Plans will vary depending on the county that you’re in,” he says, but expect to see options from large insurers such as United Healthcare, Humana, Aetna, and Cigna.
In addition to the online tool, there’s also the option to call Medicare’s toll-free number or call insurance companies directly to ask what Medicare Advantage plans they have available in your area. Or, you can call a broker who can do the research for you and help break down the best options for you.
As you gather information, look at the summary of benefits from each provider. For more accuracy, the evidence of coverage is your best resource.
Remember, since Medicare Advantage is an annually renewable plan, there is the possibility that your plan and/or your premium may change. During the annual enrollment period of October 15 to December 7, you should make time to review your current plan to note any changes. Carriers have to send out their annual notice of changes to current members after October 1, says Watts.
In addition, you can use Medicare’s tool to look over other Medicare Advantage options as well just in case a new provider or plan emerges that is a better fit for you moving forward.
Worth noting: There is also a Medicare Advantage Open Enrollment Period, from January 1 to March 31 each year. During this time, if you’re enrolled in a Medicare Advantage Plan, you are allowed to switch to a different Medicare Advantage Plan or Original Medicare with a separate Medicare drug plan once.
The Medicare Advantage average monthly plan premium was estimated to be $21 in 2021, a decrease of 11% from the previous year, according to the Centers for Medicare and Medicaid Services. In fact, since 2017, the average monthly Medicare Advantage premium has decreased by an estimated 34.2%.
That said, Medicare Advantage plans do tend to be very reasonable, and sometimes, offer extended benefits that you don’t get with Original Medicare, such as vision, hearing, and dental.
“In certain areas, like Florida, plans are so competitive that the benefits are almost as good or even better than a Medicare supplement plan,” says Watts.
This expert was consulted for insight into understanding Medicare Advantage premiums:
Ryan Watts, CEO of Choice Health Insurance (acquired by Alight Solutions)
LeRon Moore has guided Medicare beneficiaries and their families as a Medicare professional for nearly 15 years. First as a Medicare provider enrollment specialist, and now a Medicare account executive, Moore works directly with Medicare beneficiaries to ensure they understand Medicare and Medicare Advantage Plans. He’s passionate about educating, informing, and resolving issues concerning Medicare and Medicare Advantage Plans, and considers it imperative that he does all he can to educate and inform the senior community as much as possible about Medicare.