How much does the medicare advantage plan cost

Methodology

To determine the best Medicare Advantage providers, the Forbes Health editorial team evaluated all insurance companies that offer plans nationwide in terms of:

• How many states in which they provide coverage
• The types of benefits they can offer (though it varies from plan to plan)
• How the Centers for Medicare & Medicaid Services (CMS) ranked their plans, using an average to represent the company as a whole
• How agencies like A.M. Best ranked them in terms of their financial health (which impacts how reliable an insurer is when it comes to paying claims)
• How agencies like J.D. Power ranked them in terms of consumer feedback

We focused exclusively on providing general summaries of the companies and their reputations. In order to provide specific plan recommendations accurately, it’s important to take into account the ZIP code and demographic details of the individual seeking insurance coverage. To do so, we recommend using Medicare.gov’s plan finder tool or seeking the expertise of an independent, agnostic insurance agent.

What Is Medicare Advantage?

Medicare Advantage is an all-in-one plan choice alternative for receiving Medicare benefits. You may also hear it referred to as Medicare Part C. This plan is bundled with Medicare Part A and Part B and usually includes Part D, which provides prescription drug coverage.

How Do Medicare Advantage Plans Work?

Medicare pays private insurance companies to administer the benefits of Medicare Advantage plans they sell. These plans then function the same way Original Medicare (Part A and Part B) does, with the addition of benefits the private insurance provider elects to include in a given plan.

Depending on the provider and plan you choose, Medicare Advantage coverage works similarly to employer-sponsored health insurance with which you may be familiar. For a monthly premium in addition to the Medicare Part B premium, an MA plan provides set copays, coinsurance rates and deductibles for various components of care, as well as additional coverage benefits and perks.

What Does Medicare Advantage Cover?

All Medicare Advantage plans are required to offer all coverage provided by Original Medicare (Part A and Part B), which generally includes:

• Hospital inpatient care
• Skilled nursing facility care
• Nursing home care
• Hospice care
• Home health care
• Clinical research
• Ambulance services
• Durable medical equipment (DME)
• Inpatient and outpatient mental health services
• Limited outpatient prescription drugs

Some Medicare Advantage plans offer valuable additional benefits, such as:

• Prescription drug coverage
• Vision coverage
• Dental coverage
• Hearing coverage
• Fitness program coverage (including gym memberships or discounts)
• Transportation to doctor visits
• Over-the-counter drug coverage
• Other services that promote health and wellness

Medicare Advantage Open Enrollment

During the open enrollment period, which runs from October 15 to December 7 each year, you can join, switch or drop a plan for your coverage to begin on January 1 of the following year.

If you’re already enrolled in a Medicare Advantage plan, you can switch to a different Medicare Advantage plan or Original Medicare during the Medicare Advantage open enrollment period, which starts on January 1 and ends on March 31 annually. You can only make one switch during that time period.

If you’re already enrolled in Original Medicare (Parts A and B), you may be eligible to switch to a Medicare Advantage plan (Part C). You must be at least 65 years old or have certain disabilities, such as permanent kidney failure or amyotrophic lateral sclerosis (ALS). If the Medicare Advantage plan you choose doesn’t already have prescription drug coverage, you will have the option to enroll in Part D.

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How Much Does Medicare Advantage Cost?

Some Medicare Advantage plans may have lower out-of-pocket costs than Original Medicare, and some have a $0 monthly premium. Here are a few questions to consider before purchasing a plan.

• Does the plan have a monthly premium?
  • Most have a $0 premium.
  • Some pay your Part B premium.
  • If you choose a plan with a premium, it will be paid separately from your Part B premium.
• Does the plan have an annual or additional deductible?
• How much is the copayment for each visit or service?
• What type of health care services do you need, and how often do you get them?
• Does your service provider accept Medicare?
• What is the plan’s annual limit on out-of-pocket expenses?

Once you’re enrolled in a Medicare Advantage plan, it becomes your primary insurance. The provider handles paying all your claims, and the cost of your plan is likely to change every year. The plan provider (rather than Medicare) sets the amounts charged for premiums, deductibles and services. An Annual Notice of Change (ANOC) is mailed to you each September, which goes into effect the following January 1.

Factors like location play a major role in determining the cost of a Medicare Advantage plan. Costs are typically lower when you use providers in your plan’s network and service area. To find the specific cost of a Medicare Advantage plan in your zip code, visit Medicare.gov.

The following example shows how plan prices can vary significantly by location. Note: Your costs may differ from these ranges even if you live near but not in one of these areas, as rates are set by ZIP code.

Medicare Advantage Plan Annual Prices by Location

Most Medicare drug plans have a coverage gap called the “donut hole,” which means there’s a temporary limit on what the drug plan will cover. “A person gets limited coverage while in the ‘donut hole.’ whether on a Medicare Advantage plan or a separate Part D plan,” says Antinea Martin-Alexander, founder of Advocate Insurance Group in South Carolina. “The individual will pay no more than 25% of the cost of the medication in the donut hole until a total out of $6,550 in out of pocket expenses is reached. There are different items that contribute to the out-of-pocket expenses while in the donut hole: any yearly drug deductible you may have, copays for any and all your medications, what the manufacturer’s discount is on that medication and what the insurance company pays for that medication,” she says.

Types of Medicare Advantage Plans

There are four common types of Medicare Advantage plans to compare when making your selection.

Health Maintenance Organization (HMO)

• Must receive your care from providers in your plan’s network except in the case of emergency care or out-of-area dialysis
• Requires choosing a primary care provider
• Typically covers prescription drugs
• Requires specialty referrals

Preferred Provider Organization (PPO)

• Allows you to choose your service provider, but will cost more if you choose out of network
• Typically covers prescription drugs
• Doesn’t require you to select a primary care provider
• Usually doesn’t require a specialty referral

Private Fee-for-Service (PFFS)

• Allows you to choose any provider who agrees to accept PFFS plans
• Typically covers prescription drugs
• Doesn’t require you to select a primary care provider

Special Needs Plans (SNP)

• Benefits, drug coverage and provider choices are tailored to best meet the needs of the groups served by the plan.
• Membership is limited to people with specific chronic diseases or conditions that are disabling, those who require institutional or nursing home care and people who have both Medicare and Medicaid coverage.

It’s easy to switch Medicare Advantage plans if you’re already using a Medicare Advantage plan. Enroll in a new plan during one of the open enrollment periods, and your old plan will disenroll you once your new coverage begins. If you receive medical insurance through an employer or elsewhere, speak with your provider to understand how you and your family’s coverage may change while under Medicare Advantage before deciding to make the switch.

Medicare Advantage vs. Original Medicare

Consider the following details when deciding whether a Medicare Advantage plan or Original Medicare is best for you.

Medicare Advantage vs. Medicare Supplement (Medigap)

Medicare Advantage plans serve as a substitute for Original Medicare, providing that same coverage plus additional benefits like prescription drugs coverage (Part D). Meanwhile, Medicare Supplement plans, or Medigap plans, are sold by private insurance companies to people enrolled in Original Medicare to help fill the gaps of that coverage.

The 10 types of Medigap plans provide standardized coverage to beneficiaries nationwide and help pay for things like deductibles, coinsurance and copays. Because plan coverages are standardized, only monthly premium rates vary from provider to provider. Also, Medigap policies don’t typically cover prescription drugs. A person enrolled in Original Medicare who wants prescription drug coverage needs to purchase a separate Medicare Part D plan in addition to any Medicare Supplement plan. Many Medigap plans don’t provide dental, vision or hearing coverage, either.

Conversely, Medicare Advantage policies are only standardized in that they must provide the same benefits of Original Medicare. Once this threshold is met, private insurance providers can add any number of benefits and services to a plan—prescription drugs, dental care, vision care and more—to make them more comprehensive (and often more expensive).

What Are the Advantages and Disadvantages of Medicare Advantage Plans?

Medicare Advantage plans have some elements you might find appealing, as well as other features that may not match your needs. Consider both the benefits and drawbacks below before enrolling in a Medicare Advantage plan.

Medicare Advantage Benefits

• Must offer at least the same level of coverage as Original Medicare
• It’s easy to switch from one Medicare Advantage plan to another if already enrolled in one.
• Costs are typically lower, with most premiums starting at $0, lower coinsurance or copayments, limits on out-of-pocket spending and potential coverage for your Part B premium.
• Many plans offer added benefits, such as vision coverage, dental coverage, hearing coverage, drug coverage and fitness benefits.

Medicare Advantage Drawbacks

• Must use network providers and live in the service area for at least six months of the year
• If you use an out-of-network provider, your costs may be higher or not covered and may go toward your out-of-pocket limit.
• Requires prior authorizations for hospital stays, procedures, home health care and medical equipment
• Often requires referrals for specialist

How to Find the Best Medicare Advantage Plan

“Find a knowledgeable insurance agent,” says Joe Valenzuela, co-owner of Vista Mutual Insurance Services in the San Francisco Bay area. “Having an agent doesn’t cost the member anything. Medicare insurance agents are subject matter experts—many have spent years learning the ins and outs of each plan they represent. There are also many nuanced differences between Medicare Advantage plans. An agent can narrow down the search to only those plans that most closely align with the client’s needs.”

Valenzuela recommends asking what is most important to you when choosing a Medicare Advantage plan and keeping that priority top of mind. He also suggests paying attention to the fine print in the plan you select.

“Once you narrow your search down to one or two plans, look through the plan’s benefits line by line—you don’t want any surprises,” he says. “For example, a plan may have a low premium and copayments but might cost you much more each month in prescription copays.”

“A couple of important benefits to look at are the plan’s annual out-of-pocket maximum (the maximum amount the member could be responsible for in a calendar year) and your prescription drug costs,” adds Valenzuela. “Check all your medications on the plan’s formulary so you’re aware of the prescription copayments, deductibles and any restrictions.”

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Frequently Asked Questions (FAQs)

Which Medicare Advantage plan has the best dental coverage?

The Medicare Advantage plan with the best dental coverage for you depends on your geographical location. Enter your ZIP code in Medicare.gov’s plan finder tool to see which plans are available to you and which of those plans include dental care benefits. Of that shorter list, review each plan’s Evidence of Coverage document supplied by the provider to learn more about its dental coverage details.

Why are some Medicare Advantage plans free?

Many Medicare Advantage providers offer plans with $0 monthly premiums to entice prospective enrollees in a fairly competitive market. However, many of these plans balance low premium costs with higher copays, deductibles and coinsurance, so be sure to review all details of a plan to make sure it’s the best option for both your health care needs and budget.

When can I enroll in a Medicare Advantage plan?

Once you’re approved for Original Medicare by Social Security, you can enroll in a Medicare Advantage plan via Medicare.gov, directly with the insurance provider or with the assistance of a broker. Beyond your initial enrollment period, the annual enrollment period for Medicare Advantage begins on January 1 and ends on March 31 each year.

Information provided on Forbes Health is for educational purposes only. Your health and wellness is unique to you, and the products and services we review may not be right for your circumstances. We do not offer individual medical advice, diagnosis or treatment plans. For personal advice, please consult with a medical professional.

Forbes Health adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved or otherwise endorsed by our advertisers.

Tamrah Harris is a registered nurse and certified personal trainer through the American College of Sports Medicine. She is the founder and CEO of Harris Health and Wellness Communications. She has over 25 years of experience in healthcare with a passion for health education and wellness.

Alena is a professional writer, editor and manager with a lifelong passion for helping others live well. She is also a registered yoga teacher (RYT-200) and a functional medicine certified health coach. She brings more than a decade of media experience to Forbes Health, with a keen focus on building content strategy, ensuring top content quality and empowering readers to make the best health and wellness decisions for themselves.

Jessica is a writer, editor and media professional who has spent her career working with some of the most influential names in media. Prior to joining Forbes Health, Jessica was the manager of creative communications at Hearst, where she specialized in high-level production and project management. As a freelance writer, Jessica has written across a range of topics, including entertainment, travel and career. Her work can be found in Variety, Paste Magazine, The Muse and on her personal website (jessicamlester.com).

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