Medicare Advantage has a monthly premium, but it may be lower than Original Medicare

Many Medicare Advantage plans charge zero dollars per month in premiums — but "free" is misleading. You still pay the Part B premium to Medicare (currently $164.90 per month for most people in 2024, though this changes yearly). The plan itself adds nothing on top of that. However, you will pay out-of-pocket when you use care: copays for doctor visits, coinsurance for hospital stays, and deductibles before coverage kicks in.

Some people pay less overall with Medicare Advantage than with Original Medicare plus a Medigap policy, especially if they are healthy and do not need much care. Others pay more. The real cost depends on which plan you choose, how much medical care you actually use, and whether your doctors are in the plan's network.

Key Takeaways

  • Medicare Advantage plans with zero monthly premiums still require you to pay the Part B premium to Medicare, plus copays and deductibles when you use care.
  • Out-of-pocket costs vary widely by plan and by how much care you need — a plan cheap on paper can become expensive if you see many specialists or need hospital care.
  • You must use doctors and hospitals in the plan's network, except in emergencies, or pay more or nothing gets covered.
  • Plans can change their costs, networks, and coverage every year, so you need to review your plan each fall during open enrollment.

How the costs break down

A Medicare Advantage plan's total cost to you has four parts. First is the Part B premium you send to Medicare — this is the same whether you choose Original Medicare or Medicare Advantage. Second is any monthly premium the plan itself charges; many charge zero, but some charge $20 to $100 or more per month. Third is what you pay when you use care: copays (a flat fee like $25 for a doctor visit), coinsurance (a percentage of the bill), and deductibles (an amount you pay before the plan starts paying). Fourth is anything the plan does not cover at all.

Medicare Advantage plans must cover the same basic services as Original Medicare — hospital, doctor, and outpatient care. But they set their own copays and deductibles. One plan might charge $10 for a primary care visit and $50 for a specialist; another might charge $30 and $75. One might have a $500 deductible; another might have none. These differences add up fast if you see doctors often.

Most Medicare Advantage plans also include prescription drug coverage (Part D) and sometimes dental, vision, or hearing benefits. Original Medicare does not. If you choose Original Medicare instead, you have to buy Part D separately, and dental and vision are not covered at all. This can make Medicare Advantage look cheaper on paper — but only if you actually use those extra benefits.

Out-of-pocket limits protect you, but only up to a point

Every Medicare Advantage plan has a yearly out-of-pocket maximum — a cap on how much you will pay in copays and coinsurance combined. Once you hit that number, the plan pays 100% of covered services for the rest of the year. In 2024, this maximum ranges from about $5,000 to $10,000 per person, depending on the plan, though these numbers change yearly.

This limit sounds like protection, and it is — but only for care the plan covers. If a service is not covered, or if you see an out-of-network doctor without emergency justification, you pay the full bill and it does not count toward your out-of-pocket maximum. Hospital stays, specialist visits, and imaging tests can run into thousands of dollars quickly, so the difference between a plan that covers something and one that does not can be enormous.

Network restrictions mean you may pay more for your current doctors

Medicare Advantage plans contract with specific doctors, hospitals, and clinics — their "network." You pay the copay or coinsurance amount only when you see in-network providers. If you see an out-of-network provider, you typically pay more, sometimes much more. Some plans will not cover out-of-network care at all except in true emergencies.

Before you choose a plan, you need to check whether your current doctors are in the network. If your cardiologist or rheumatologist is not, you have two choices: switch doctors or pay out-of-network rates. Many people discover this too late — after they have already enrolled and tried to schedule an appointment. Plans can also remove doctors from their network or change which hospitals they contract with, sometimes with little notice.

Plan costs and coverage change every year

A Medicare Advantage plan that costs you $50 per month this year might cost $75 next year. Copays can go up. Deductibles can change. Doctors can leave the network. Prescription drugs can move to a higher tier, meaning you pay more. The plan might add or drop coverage for certain services.

This is why you must review your plan every fall during the Annual Enrollment Period (October 15 to December 7). Even if you liked your plan last year, it may not be the best choice for you this year. You can switch to a different plan, switch to Original Medicare, or stay where you are — but you have to make an active choice. If you do nothing, you stay in your current plan, even if it is no longer a good fit.

Comparing Medicare Advantage to Original Medicare plus Medigap

Some people pay less with Medicare Advantage; others pay less with Original Medicare plus a Medigap supplemental policy. The answer depends on your health, your doctors, and which specific plans are available to you.

Medicare Advantage works best if you are willing to use the plan's network, do not mind copays and deductibles, and want prescription drug coverage included. It often costs less per month if you are healthy and do not see many doctors. Original Medicare plus Medigap works best if you want to see any doctor you choose, do not want to worry about copays, and are willing to pay a higher monthly premium for that freedom. Medigap premiums vary by state and by insurance company, but typically run $100 to $300 per month.

There is no universally "cheaper" option. You have to look at the specific plans available where you live, check whether your doctors are in network, and add up what you would actually pay under each scenario.

Questions to ask your doctor or plan before you enroll

Before you choose a Medicare Advantage plan, contact your primary care doctor and any specialists you see regularly. Ask whether they accept that specific plan and whether they are accepting new patients. Ask your pharmacy whether they work with the plan's drug formulary (the list of covered medications). If you have a chronic condition that requires certain treatments or imaging, ask whether the plan covers those without prior authorization delays.

Call the plan itself and ask about the out-of-pocket maximum, whether there are any services not covered, and what happens if you need care while traveling. Ask whether you can see your current doctors or whether you would need to switch. Get the answers in writing if possible, because verbal promises do not always hold up when you try to use them.

Frequently Asked Questions

If a Medicare Advantage plan shows zero premium, why would I ever choose Original Medicare?

Because zero premium does not mean zero cost. If you see many doctors, need hospital care, or take expensive medications, your copays and deductibles can add up to thousands per year. Original Medicare plus Medigap has higher monthly premiums but lower or zero copays, so your total cost may be less if you use a lot of care. You also can see any doctor who accepts Medicare, not just those in a network.

Can I switch out of Medicare Advantage if I do not like it?

Yes, during the Annual Enrollment Period (October 15 to December 7) you can switch to a different Medicare Advantage plan, switch to Original Medicare, or switch to a Medicare Advantage plan with different coverage. Changes take effect January 1. Outside this window, you can switch only if you have a may have access to life event like moving out of the plan's service area or losing other insurance.

What if my doctor leaves the Medicare Advantage plan's network?

The plan must notify you, usually with at least 30 days' notice. You can then switch to a different plan or to Original Medicare outside the normal enrollment period. If you stay in the plan and continue seeing that doctor, you will pay out-of-network rates. Keep your enrollment materials so you know your rights if this happens.

Does the out-of-pocket maximum include the Part B premium?

No. The Part B premium you pay to Medicare is separate and does not count toward your plan's out-of-pocket maximum. Only copays, coinsurance, and deductibles for covered services count. This is why the out-of-pocket maximum is not your true maximum cost for the year.

What happens if I need care outside the plan's service area?

True emergencies are covered anywhere in the United States. Non-emergency care outside the service area is usually not covered, or covered only at out-of-network rates. If you travel frequently or spend part of the year in another state, ask the plan specifically about out-of-area coverage before you enroll. Some plans have better national networks than others.