What You Pay With a Medicare Advantage Plan

Calendar Icon Updated January 15, 2019

Medicare Advantage Plans are private health insurance plans that are approved by Medicare. These types of plans—such as Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs) and Private-Fee-for-Service (PFFS) plans, among others—include coverage for all Medicare Part A and Part B services, except hospice care. (Original Medicare covers the services you get while in hospice care.)

Medicare Advantage Plans typically require a monthly premium, though some plans have a $0 monthly premium. The premium varies from plan to plan. Every year, the plans (rather than Medicare) determine the amounts they will charge for premiums, deductibles, and services. The amount you will have to pay may only change one time per year, on the first day of the year (January 1).

While a particular plan might appear to be low cost, remember that there could be other costs that you’ll have to pay if you enroll in. For instance, some of the costs you’ll have to contribute could include the Medicare Part B premium, prescription drug costs, coinsurance, copayments, and deductibles. In some cases, you might end up paying more due to these costs than you would have if you’d picked a plan with a higher premium.

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Ultimately, the amount you will have to pay out-of-pocket in a Medicare Advantage Plan will depend on many factors, including all of the following things.

  • How much the plan charges for a monthly premium.
  • If the plan pays for any part of your monthly Medicare Part B (Medical Insurance) premium. (You typically still have to pay a Part B premium if you are enrolled in a Medicare Advantage Plan.)
  • What the plan’s deductible is (if there is one) or if there are any additional deductibles. (Again, each plan establishes the amounts it will charge for premiums, services, co-payments, and deductibles.)
  • The required copayment or coinsurance for each visit to a health services provider. (For example, you might have to make a copayment in the amount of $10 or $20 each time you visit a doctor.)
  • What type of health care services you require and how frequently you receive them.
  • Whether you adhere to the plan’s rules, such as only going to network providers.
  • What the plan’s yearly out-of-pocket limit is for medical costs. (After the limit is reached, there is no charge for covered services.)
  • If you receive Medicaid or other assistance from the state where you live.

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