Are there additional costs for Medicare Advantage plans?
Do I have to pay extra for a Medicare Advantage plan, and what are the potential out-of-pocket expenses?
Yes, you may have to pay extra for a Medicare Advantage Plan (Part C), but the amount depends on the specific plan you choose. Here’s a breakdown of the costs you might encounter and the potential out-of-pocket expenses:
Monthly Premiums:
While some Medicare Advantage plans offer $0 premiums, others may charge a monthly premium in addition to your Medicare Part B premium. Even if your Medicare Advantage plan has a $0 premium, you are still responsible for paying your standard Part B premium, which is $174.70 per month in 2024 for most people.
If your Medicare Advantage plan includes Part D prescription drug coverage, the premium may reflect the inclusion of drug coverage.
Deductibles:
Medicare Advantage plans may have deductibles for medical services and prescription drugs. The deductible is the amount you must pay out of pocket before your plan begins covering costs. Not all plans have deductibles, so it’s important to review your plan details.
Copayments and Coinsurance:
Copayments are fixed amounts you pay for services like doctor visits, specialist consultations, or prescription drugs. For example, you might pay $20 to see your primary care physician or $40 for a specialist visit.
Coinsurance is a percentage of the cost for certain services. For instance, you may pay 20% of the cost of durable medical equipment or outpatient procedures.
Out-of-Pocket Maximum:
One key benefit of Medicare Advantage plans is that they include an annual out-of-pocket maximum. This is the maximum amount you will have to pay in a year for covered services. Once you reach this limit, the plan will cover 100% of your medical costs for the rest of the year.
The out-of-pocket maximum varies by plan but is capped by Medicare at $8,850 for in-network services in 2024. Some plans may have lower limits. This protects you from unlimited expenses, which is not the case with Original Medicare.
Extra Benefits:
Many Medicare Advantage plans include additional benefits not covered by Original Medicare, such as dental, vision, hearing, and fitness programs. While these services can add value, some plans may require additional copayments or coinsurance for these extra benefits.
Prescription Drug Costs:
If your Medicare Advantage plan includes prescription drug coverage (Part D), you may have out-of-pocket costs for medications. These costs include a deductible (if applicable), copayments or coinsurance for each prescription, and costs that may vary based on the drug tier (generic, brand-name, specialty, etc.).
Key Takeaways:
You may pay an additional monthly premium for your Medicare Advantage plan, but some plans offer $0 premiums.
You are still responsible for paying your Medicare Part B premium.
Out-of-pocket costs include deductibles, copayments, and coinsurance for various medical services.
Medicare Advantage plans offer an annual out-of-pocket maximum, which limits your total expenses for the year, protecting you from high medical costs.
To explore the specific costs and coverage details of Medicare Advantage plans available to you, schedule an appointment with a Tsunami Advisor here: Schedule an Appointment.
