Medicare Advantage costs break into three parts: your monthly premium, what you pay when you use care, and any out-of-pocket limits

Medicare Advantage plans (also called Part C) bundle your hospital, doctor, and prescription drug coverage into one plan run by a private insurance company. What you pay depends on which plan you pick, where you live, and how much medical care you use. Some plans charge zero premium — you pay only Medicare's Part B premium to the government — while others charge $50 to $200 per month on top of that. When you see a doctor or fill a prescription, you also pay copays, coinsurance, or deductibles that vary by plan.

The total cost is not the same for everyone. A plan that costs nothing per month in one county might not exist in another. A plan with low premiums might have high copays for doctor visits. Understanding what each piece costs, and what limits exist on your total spending, helps you pick a plan that matches both your budget and your expected medical needs.

Key Takeaways

  • Medicare Advantage premiums range from $0 to over $200 per month depending on the plan and your location, and you still pay Medicare's Part B premium to the government separately.
  • Every time you use care — a doctor visit, hospital stay, or prescription — you pay a copay, coinsurance percentage, or deductible that the plan sets, and these amounts vary widely between plans.
  • Each plan has an out-of-pocket maximum, usually between $5,000 and $10,000, that caps your total yearly spending on copays and coinsurance once you hit it.
  • Plans available to you and their costs change every year, so you must review your options during the annual enrollment period (October 15 to December 7) to avoid overpaying.

The three costs you pay: premium, copays, and out-of-pocket maximum

Premium is the monthly fee you pay to the insurance company. Many Medicare Advantage plans have a $0 premium, meaning you pay nothing extra beyond Medicare's Part B premium (which is $164.90 per month in 2024, though this amount changes yearly). Other plans charge $25, $50, $100, or more per month. Plans with lower premiums often have higher copays; plans with higher premiums often have lower copays. The premium you pay depends entirely on which plan you choose and where you live.

Copays and coinsurance are what you pay each time you use care. A copay is a fixed dollar amount — for example, $15 for a doctor visit or $50 for an emergency room visit. Coinsurance is a percentage of the cost — for example, you pay 20% of the hospital bill and the plan pays 80%. Different plans set different copays and coinsurance rates. One plan might charge $10 per doctor visit; another might charge $30. One plan might cover 80% of a hospital stay; another might cover 90%. You need to look at the plan's summary to know what you will pay.

Out-of-pocket maximum is the most you will spend on copays and coinsurance in a year. Once you hit this limit, the plan pays 100% of covered care for the rest of the year. Out-of-pocket maximums for Medicare Advantage plans in 2024 range from about $5,000 to $10,000, depending on the plan. This limit does not include your monthly premium — you pay that no matter what. It also does not include costs for care the plan does not cover, such as dental or vision (unless your specific plan includes those).

How location affects what plans cost and what is available

The same plan name offered by the same insurance company can have different premiums and copays in different counties. A UnitedHealthcare Advantage plan in Los Angeles might cost $0 per month with a $15 copay for doctor visits, while the same plan name in rural Nevada might cost $45 per month with a $25 copay. Insurance companies set rates based on local healthcare costs, the number of doctors and hospitals in the area, and how much people in that area use medical services.

Not all plans are available everywhere. A plan with excellent coverage might be offered only in urban areas. Rural counties sometimes have fewer plans to choose from. When you log into Medicare.gov or call 1-800-MEDICARE, the system shows you only the plans available in your zip code, so you will see your actual options rather than plans you cannot join.

Prescription drug costs under Medicare Advantage

Most Medicare Advantage plans include prescription drug coverage (Part D), so you do not buy a separate drug plan. When you fill a prescription, you pay a copay or coinsurance set by your plan. Common copays are $5 to $15 for generic drugs, $25 to $50 for brand-name drugs, and $100 or more for specialty drugs. Some plans use a tiered system: Tier 1 drugs (usually generics) cost less, Tier 2 drugs (brand-name) cost more, and Tier 3 or 4 drugs (newer or specialty drugs) cost the most.

If you take expensive medications, the drug costs can add up quickly. Some plans have a deductible you must meet before the plan starts paying for drugs — this might be $0 to $500 depending on the plan. Once you and the plan together spend a certain amount on drugs in a year (called the "coverage gap" threshold), your copays drop and the plan pays a larger share. The exact amounts change yearly, so check your plan's drug formulary (the list of covered drugs and their costs) before you enroll.

Extra benefits and what they might cost you

Many Medicare Advantage plans offer benefits that original Medicare does not cover, such as dental, vision, hearing, or fitness programs. These extras can reduce your out-of-pocket costs for those services. A plan might cover two dental cleanings per year, eye exams, or a gym membership. However, these benefits vary widely. One plan might cover $1,000 per year in dental work; another might cover $500. Some plans charge copays for these services; others do not.

Do not assume a plan with more extra benefits will cost less overall. A plan with generous dental coverage might have higher copays for doctor visits. A plan with a fitness benefit might have a higher premium. Compare what you actually use — if you rarely go to the dentist, a plan with extensive dental coverage does not save you money. If you take many medications, a plan with low drug copays matters more than a fitness benefit.

How costs change from year to year

Medicare Advantage plan premiums, copays, deductibles, and out-of-pocket maximums change every year. A plan that cost $0 per month in 2024 might cost $25 in 2025. A copay that was $15 might become $20. New plans enter the market; old plans leave. Insurance companies adjust rates based on how much members used care in the previous year and what they expect to spend in the coming year.

This is why you must review your plan options every year during the annual enrollment period, which runs from October 15 to December 7. Even if you liked your plan last year, it may have changed. A different plan might now be cheaper or have better coverage for your needs. Medicare.gov lets you compare plans side by side, and you can switch to a new plan or return to original Medicare during this window. If you do not actively choose a plan during enrollment, your current plan continues into the next year, but you may miss a better option.

Frequently Asked Questions

Do I have to pay the Part B premium if I am on a Medicare Advantage plan?

Yes. You pay Medicare's Part B premium to the government no matter which Medicare Advantage plan you choose. Part B covers doctor visits and outpatient care. In 2024, the standard Part B premium is $164.90 per month, though higher-income beneficiaries pay more. This is separate from any premium your Medicare Advantage plan charges.

What happens if I cannot afford my plan's copays?

If your income is low, you may be able to get help paying copays, premiums, and deductibles through Medicaid or the Medicare Savings Program. Contact your state Medicaid office or call 1-800-MEDICARE to learn whether you may have access to. Some plans also offer copay information programs for members with financial hardship.

Can I switch plans if my costs go up?

You can switch plans during the annual enrollment period (October 15 to December 7) each year, or if you have a may have access to life event such as moving, losing employer coverage, or a change in income. Outside these windows, you are locked into your current plan unless you switch back to original Medicare during the general enrollment period (January 1 to March 31).

Are there plans with no premium and low copays?

Some plans have $0 premiums and low copays, but they are not available everywhere and they may have higher out-of-pocket maximums or narrower networks of doctors. Plans with the lowest total cost depend on how much care you use. Compare the plans available in your area using Medicare.gov's plan comparison tool to find the best fit for your situation.

What is not covered by Medicare Advantage?

Medicare Advantage covers the same basic services as original Medicare — hospital, doctor, and preventive care. It does not cover long-term care (nursing home or home health aide services), dental (unless your plan includes it), vision (unless your plan includes it), or hearing aids. Some plans offer these as add-on benefits, but you should verify what is and is not covered before you enroll.