Medicare Advantage Costs

69% of the 28.4 million Americans enrolled in a Medicare Advantage plan in 2022 paid no premiums for their plan itself. But to enroll in an Advantage plan, they still had to pay the monthly premium for Medicare Part B (medical insurance).

There are 3,834 different Medicare Advantage plans sold by private insurance companies that contract with Medicare in 2022. The plans are required to provide all the same coverage offered by Original Medicare — Part A and Part B.

Medicare Advantage plans can offer additional benefits and that can increase their costs. So, monthly premiums for Medicare Advantage plans vary based on the terms of the plan, the benefits offered and other circumstances.

The average monthly premiums for Medicare Advantage plans have decreased steadily since 2015, according to a 2022 study from the Kaiser Family Foundation. The average HMO monthly premium is $16 a month in 2022. This has been driven largely by steep declines in premiums for local PPO plans.

But regional PPO plans have bucked the trend, with premium costs increasing since 2015. An average PPO premium is $49 a month in 2022.

It’s important to look beyond just the monthly premium when shopping for a Medicare Advantage plan. You need to consider your total Medicare costs. These include deductibles, copayments, coinsurance and maximum out-of-pocket costs.

Since Medicare Advantage plans are sold by private insurers, the companies can make several decisions that affect the price of each plan.

Unlike Medigap, which has 10 standardized plans across all companies, there are no standardized Medicare Advantage plans.

You will need to compare Medicare Advantage plans to find the right benefits and prices for your health care needs and personal finances.

A monthly $0 Medicare Advantage premium may sound enticing, but the plan may come with bare bones coverage. When comparing the costs of Medicare Advantage plans, be sure to consider the benefits you are receiving.

A low premium may not be a good bargain if you end up paying hefty copayments on prescription drugs or have to pay the full costs of benefits you passed up for the lower monthly payment.

Consider how much you’ll likely pay per year for various health care services, then compare that to the premiums you’d pay over the course of the year.

Medicare sets limits on how much a Medicare Advantage plan can require you to pay out-of-pocket each year. In 2022, the limit is $7,550 for in-network services and $11,300 combined for in-network and out-of-network services.

The average is considerably lower than those limits, but it can still cost you thousands of dollars.