Medicare Advantage costs vary by plan, location, and your income — and they're not the same as Original Medicare

Medicare Advantage (Part C) plans bundle hospital, medical, and prescription drug coverage into one monthly premium. What you pay depends on which plan you choose, where you live, and whether you may have access to for income-based savings. Unlike Original Medicare, where costs are the same nationwide, Advantage premiums and out-of-pocket limits change by county and carrier.

Most people pay a monthly premium, a yearly deductible, copays at the doctor's office, and coinsurance for hospital stays. Some plans charge nothing monthly but have higher costs when you use care. Others cost more upfront but cap your yearly spending. The key is understanding what each number means and how they add up over a year.

Key Takeaways

  • Medicare Advantage premiums range from $0 to several hundred dollars per month, depending on the plan and your county.
  • You still pay Medicare Part B premiums (currently $164.90 per month for most people in 2024) on top of any Advantage plan premium.
  • Out-of-pocket limits cap what you spend on deductibles, copays, and coinsurance in a year — the legal maximum is $7,550 for in-network care in 2024, but many plans set lower limits.
  • Extra Help and Medicaid can reduce or eliminate your premiums and out-of-pocket costs if your income is low enough.
  • Costs reset every January 1st, so your deductible and out-of-pocket spending start over each year.

Monthly premiums and what they cover

A Medicare Advantage premium is what you pay each month for the plan itself. This is separate from your Part B premium, which you pay to Medicare no matter which plan you choose. Some Advantage plans have a $0 premium, meaning you only pay the Part B premium. Others charge $50, $100, or more per month.

The premium you see advertised is the base cost for that plan in your county. If you receive Extra Help (a federal program for people with low income), your premium may be reduced or covered entirely. If you're also on Medicaid, your state may pay your premium for you. Without these programs, you pay the full amount out of your Social Security check or bank account each month.

The premium does not include what you pay when you actually use care. That comes later, in the form of deductibles, copays, and coinsurance.

Deductibles, copays, and coinsurance

A deductible is the amount you pay out of your own pocket before the plan starts to help. Some Advantage plans have no deductible. Others ask you to pay $500, $1,000, or more before coverage kicks in. Once you meet the deductible, you move to copays and coinsurance.

A copay is a fixed amount you pay for a specific service — for example, $20 to see your primary care doctor or $50 for an urgent care visit. A coinsurance is a percentage of the cost you pay after the deductible is met. For instance, you might pay 20% of the cost of a hospital stay, and the plan pays 80%.

These costs vary widely by plan. A plan with a $0 premium might have a $1,500 deductible and higher copays. A plan with a $150 monthly premium might have no deductible and lower copays. There is no single "right" answer — it depends on how much care you expect to use.

Out-of-pocket limits and how they protect you

Every Medicare Advantage plan has an out-of-pocket limit — a yearly cap on what you can spend on deductibles, copays, and coinsurance for in-network care. Once you reach that limit, the plan pays 100% of your covered in-network costs for the rest of the year.

The legal maximum out-of-pocket limit for 2024 is $7,550 for in-network care. However, many plans set their own limits lower than this — some as low as $3,000 or $4,000. Plans with lower out-of-pocket limits often charge higher monthly premiums. Plans with higher limits often charge lower or no premiums.

Out-of-pocket limits reset on January 1st each year. If you reach your limit in November, you start over at $0 in January. This is why some people schedule expensive procedures before year-end if they are close to their limit.

Prescription drug costs under Medicare Advantage

Most Medicare Advantage plans include prescription drug coverage (Part D). You pay a copay or coinsurance for each medication, and these costs count toward your out-of-pocket limit. Some plans charge $0 for generic drugs but more for brand-name medications. Others have a tiered system where the copay depends on which tier the drug is on.

If you take expensive medications, check the plan's formulary — a list of covered drugs — before you join. A plan with a low monthly premium might not cover the specific drugs you need, or might cover them only at a higher copay. Some plans require prior authorization, meaning the doctor must get approval from the plan before you can fill the prescription.

Costs for the same drug can differ significantly between plans in your area. Using the Medicare Plan Finder tool on Medicare.gov lets you enter your medications and see which plans cover them and at what cost.

How income affects what you pay

If your income is low, you may be able to reduce or eliminate your costs through Extra Help (also called the Low-Income Subsidy program). Extra Help can pay your monthly premium, reduce your deductible, and lower your copays and coinsurance. You do not have to be on Medicaid to receive Extra Help.

To learn about you may have access to, contact Social Security at 1-800-772-1213 or visit ssa.gov. You can also explore through your state Medicaid office. Income limits vary by state and family size, but generally, if you earn less than about $20,000 per year as an individual or $27,000 as a couple, you may be may be able to access.

If you are also on Medicaid (your state's program for low-income people), your state may pay your Medicare Advantage premium and cover some or all of your out-of-pocket costs. This varies by state, so contact your state Medicaid office to learn what your state covers.

Comparing costs across different plans

The best way to understand what you will actually pay is to compare plans side by side. Medicare.gov's Plan Finder tool lets you enter your medications, doctors, and hospitals, then shows you the estimated yearly cost for each plan in your area.

When comparing, look at the total cost, not just the premium. A plan with a $0 premium might cost more overall if you use a lot of care. A plan with a higher premium might save you money if you have frequent doctor visits or take expensive medications. The Plan Finder estimates your costs based on your specific situation, which is more useful than looking at premiums alone.

You can also call plans directly to ask about costs for your specific doctors or hospitals. Some plans have preferred providers who cost less than out-of-network providers. If you have a doctor you want to keep, confirm they are in the plan's network before you join.

Network restrictions and out-of-network costs

Medicare Advantage plans have networks — lists of doctors, hospitals, and other providers you can see. If you see an out-of-network provider, you usually pay more, sometimes much more. Some plans do not cover out-of-network care at all, except in emergencies.

Before you join a plan, check whether your current doctors and hospital are in the network. If your doctor is not in the network, ask whether they accept the plan or whether you need to switch. If you travel frequently or live part of the year in another state, ask about out-of-network coverage in other areas.

Emergency care is usually covered even out of network, but you may still owe a copay. If you need urgent care while traveling, call the plan's customer service line to find out what you will owe before you go to the emergency room.

Frequently Asked Questions

Do I have to pay Part B premiums if I choose Medicare Advantage?

Yes. Part B premiums are separate from Medicare Advantage premiums. You pay both. In 2024, most people pay $164.90 per month for Part B, though the amount varies based on your income. If you have Extra Help, it may cover your Part B premium.

What happens to my costs if I switch plans mid-year?

You can only switch plans during the Annual Enrollment Period (October 15 to December 7) or if you have a may have access to life event like moving to a new county or losing other coverage. If you switch, your deductible and out-of-pocket spending reset with the new plan on January 1st.

Are dental and vision covered under Medicare Advantage?

Some plans include dental and vision benefits, but coverage varies widely. Many plans cover routine cleanings and eye exams but not major work like crowns or glasses. Check the plan's Summary of Benefits document to see exactly what is covered and what you pay.

What if my plan raises its premium or changes its benefits?

Plans can change their premiums, deductibles, and copays each year. You receive a notice in the fall showing what changes are coming. If the changes are significant, you can switch to a different plan during the Annual Enrollment Period without penalty.

Can I use my Medicare Advantage plan if I travel outside the United States?

Most Medicare Advantage plans do not cover care outside the U.S., except in rare cases like emergencies in Canada or Mexico. If you travel internationally, you may need supplemental travel insurance. Some plans offer limited coverage in U.S. territories. Check your plan's coverage area before you travel.