Explore the fixed, variable, and average costs for Medicare Advantage Plans in 2021.
When it comes to selecting a Medicare Advantage Plan, you have a lot to consider. You need to find the right mix of benefits to match your particular healthcare needs, but you also want to minimize your out-of-pocket expenses and ensure your overall Medicare Advantage plan cost is as low as possible.
Some Medicare Advantage Plans have no monthly premium, but charge more when it comes to cost-sharing. Others have higher monthly premiums but may absorb more of the cost of treatment when you receive it. There are also differences in deductibles and annual caps on out-of-pocket spending.
Get an overview of the Medicare Advantage Plan costs you’re likely to encounter to help you research your healthcare options.
Medicare Advantage Plans, also known as Medicare Part C, are a type of health plan provided by private insurance companies. As an alternative to Original Medicare, Part C plans offer a choice in the way you receive health benefits, so you can select the optimal coverage for your needs.
All Medicare Advantage Plans must provide the same coverage as Original Medicare Part A (hospital insurance) and Part B (medical insurance). Plans may also offer supplemental health benefits, such as prescription drugs, vision, dental, and hearing. You must choose a plan that is available in your service area.
The cost of a Medicare Advantage Plan depends on the insurance company, the type of plan, and the benefits offered. It’s important to shop around and consider how you might use the plan and estimate your overall costs.
Generally, you pay:
The monthly premiums charged by Medicare Advantage Plans vary. More than 90% of beneficiaries have access to at least one plan in their service area with no monthly premium.
About 60% of Medicare Advantage Plan subscribers choose a plan without a monthly premium, according to the Kaiser Family Foundation. For those who pay premiums, the average cost is $60 per month in 2021.
Here’s a breakdown of premium amounts paid by Medicare Advantage subscribers in 2021:
Overall, the average monthly premium for a plan with prescription drug coverage is $19 in 2022.
Some plans with no monthly premiums may have higher cost-sharing. Other plans with higher monthly premiums may cover more of the costs at the time you receive services. If you anticipate needing regular treatment, a higher monthly premium may make sense if more of your per-service costs are covered.
In addition to monthly premiums, you should consider how much you’re asked to pay for health care services.
Here are some of the costs you should be aware of:
Copayments are a dollar amount you must pay when receiving a service. For example, you may need to pay $10 per doctor visit.
Here are some factors to consider when you compare Medicare Advantage plans.
Think about the benefits you would use under each plan and your potential savings.
Once you’ve assessed which benefits you’re likely to use, compare the cost of each Medicare Advantage Plan by estimating your expenditures based on your anticipated healthcare needs. Take into consideration:
The plan’s cap on out-of-pocket costs is also important. All Medicare Advantage Plans must set a limit on out-of-pocket expenditures for Part A and B services. Once you’ve reached this maximum, the plan can’t charge you anything additional for these services.
In 2021, the average out-of-pocket limit was $5,091 for in-network services through an HMO or PPO and $9,208 for out-of-network services through PPOs.
While a plan without a premium may seem like the most cost-effective option at first glance, these plans may end up costing more in the long run, depending on your needs. If you anticipate seeing a physician regularly or needing frequent treatment, a plan with a lower out-of-pocket limit could save you money over the long-term.
Medicare offers an online tool to help compare Medicare Advantage plans in your service area.
If you have limited resources and are below certain income limits, you may qualify for assistance from your state’s Medicaid program.
Medicare Savings Programs provide eligible beneficiaries with a health plan that has a high deductible and a bank account. Funds are deposited into the bank account that can be used to pay for healthcare services, which may include some of your Part A and B premiums, deductibles, coinsurance, and co-payments.
Special Needs Plans are a type of Medicare Advantage plan that limits enrollment to individuals with chronic health conditions or other high needs. Dual-Eligible Special Needs Plans are designed for those who qualify for Medicare and medical assistance from a state plan under Medicaid. These plans cover most Medicare costs, but eligibility varies by state.
LeRon Moore has guided Medicare beneficiaries and their families as a Medicare professional since 2007. 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.
Moore holds a bachelor’s degree from Southern New Hampshire University and is A+ Certified with a Medical Records Clerk Certification and Medical Terminology Certification from Midlands Technical College.
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.