Determining the average costs for Medicare plans is important for selecting a plan that offers the most benefit to you while staying within your budget. The costs for Medicare depend on your plan choice, your health conditions and frequency of doctor visits and hospitalizations, and prescription drugs required for treatments. This blog post provides information on the Medicare costs you can expect based on the type of plans you choose.
Understanding Medicare Advantage Part C
Medicare Advantage, also referred to as Medicare Part C, is an alternative to Original Medicare. Medicare Part C plans offer the same benefits as Original Medicare, however, they are administered and provided by private health insurance companies and health plans. All Part C plans must be approved by the Centers for Medicare and Medicaid Services and providers and plan options will vary by state. When you enroll in a Medicare Advantage plan, all your care will be provided by the plan through their network of medical providers and pharmacies. Simply, Medicare Advantage replaces your Original Medicare benefits. It’s necessary to understand Part C plan coverage, network and formulary (list of covered prescription drugs) when calculating plan costs.
But first, let’s discuss the specific cost structures that come with Medicare Part C plans.
- Premiums. Premiums are the monthly fee that you will pay for your Medicare Part C plan coverage. Premium payments will vary depending on the plan you select.
- Deductibles. A deductible is the amount you will have to spend before your Medicare benefits will pay for your medical care and expenses. (Note that plans usually provide coverage for primary care physician visits and other benefits with a copayment without needing to satisfy your deductible.)
- Copayments. A copayment is a fixed dollar amount that a person will pay when receiving certain treatments under Medicare or Medicare Advantage.
- Coinsurance. While a copay is a fixed amount, coinsurance is a percentage of the medical costs. Coinsurance will come into play after you’ve met your deductible.
- Out-of-Pocket Maximums. This is the maximum amount that you would have to pay out-of-pocket for medical costs during a given year; it caps your medical expenditures so you can properly budget should a high-cost medical event happen.
How Much Do Medicare Advantage Part C Plans Cost?
Each Medicare Advantage plan will have different costs set by the plan provider. Beneficiaries will need to evaluate the additional benefits, network and formulary a plan provides against those costs to determine the value of each plan. For example, some plans may offer additional benefits, but could differ in their premium costs – and many Part C plans offer monthly premiums as low as zero dollars. Deductibles are also determined by the plan provider, and are an important part of your calculations for out-of-pocket costs. In addition, beneficiaries also need to know the anticipated costs for copayments and their coinsurance percentages.
Medicare Advantage Part C plans will also have an out-of-pocket maximum. This is the maximum amount of money that you may pay out-of-pocket during a given year for covered, in-network medical expenses. The CMS designates this capped amount annually, and it changes from year to year. In 2021, the CMS set the out-of-pocket maximum at $7,550 for Medicare Advantage plans.
Generally speaking, the cost of Medicare Advantage Part C will vary depending on your plan choice and medical/prescription drug needs.
Understanding Medicare Advantage plan cost structures is an important step before you can calculate your estimated expenses when considering specific Part C plans. With this knowledge, you can confidently evaluate Medicare Advantage plan costs alongside important considerations such as added benefits, network, and formulary. For individualized assistance with assessing Medicare plan options, contact an independent Medicare insurance agent. Call Medicare Portal today for help reviewing your Medicare plan and suitable options.