Medicare Part C, also known as Medicare Advantage, is an alternative to Original Medicare that allows you to get your Medicare benefits through private insurance plans. Medicare Advantage Plans cover everything Original Medicare covers and may offer additional benefits like vision, hearing, dental, and wellness programs.
The average costs for Medicare Advantage Plans in 2023 to 2024 include monthly premiums, deductibles, copays, and maximum out-of-pocket limits that can vary significantly between plans. Let’s take a look at the typical costs for Medicare Part C coverage so you know what to expect as you evaluate plans and prepare for Medicare enrollment.
Monthly Medicare Part B Premiums After Inflation Reduction Act
Most Medicare Advantage Plans charge a monthly premium in addition to the monthly premium you pay for Medicare Part B. The Part B premium in 2023 to 2024 is $164.90 per month for most beneficiaries.
Medicare Advantage Plans have different premium amounts depending on the benefits offered, deductible and copays, and overall value of the plan. The average monthly premium for Medicare Advantage Plans in 2023 is around $20 per month. Many plans have zero dollar monthly premiums.
Plans with more robust benefits tend to have higher monthly premiums. But thanks to the Inflation Reduction Act, average premiums for Medicare Advantage Plans are expected to drop 14% in 2023 compared to 2022. This represents over $800 in average annual savings for Medicare Advantage enrollees.
The maximum out-of-pocket limit may also impact the monthly premium. Plans with lower out-of-pocket maximums often have higher premiums.
Deductibles in 2023 to 2024
Many Medicare Advantage Plans have an annual deductible, which is the amount you pay for covered medical services before the plan starts paying. The average Medicare Advantage deductible in 2023 is around $285.
Some Medicare Advantage Plans have no deductible at all or have a lower deductible such as $100, $200 or $250. Plans with lower or no deductibles typically have higher monthly premiums.
The Part B deductible does not apply for services covered under your Medicare Advantage Plan. Original Medicare has a $226 Part B deductible in 2023.
Medicare Advantage Plans have different copayment amounts that apply when you receive covered services like doctor visits, specialist visits, hospitalizations, and prescription drugs. The average copays in 2023 are approximately:
- Primary care visit: $0 to $15
- Specialist visit: $35 to $50
- Inpatient hospital stay: $285 per day
- Emergency room: $90
- Urgent care: $40
- Prescription drugs: $0 to $12
Medicare programs with lower copays often have higher premiums. Copays for each service vary considerably between Medicare Advantage Plans.
Maximum Out-of-Pocket Limit
All Medicare Advantage Plans have a yearly limit on your total out-of-pocket costs for Part A and Part B medical services. Once you reach this limit, you pay nothing for covered services for the remainder of the year.
The average maximum out-of-pocket limit for Medicare Advantage Plans in 2023 is around $5,900. Some plans have lower limits of $3,900 or $4,900. The maximum allowed out-of-pocket amount in 2023 is $8,300.
Plans with lower maximum out-of-pocket limits tend to have higher monthly premiums. This represents a trade-off between higher upfront premiums versus lower total yearly costs.
Prescription Drug Coverage
Most Medicare Advantage Plans include prescription drug coverage (Medicare Part D). The average estimated cost for Part D coverage in an Advantage Plan in 2023 is around $7 per month.
Copays for prescription drugs under Medicare Advantage Plans average around $4 to $12 per prescription for generics and $35 to $50 for brand name drugs. Part D Plan deductibles average around $100.
Plans with lower drug copays and deductibles have higher overall premiums. But drug coverage is bundled together seamlessly with medical coverage under Medicare Advantage.
With Original Medicare you need separate Part D and Medigap Plans to get comprehensive coverage.
Most Medicare Advantage Plans include additional benefits not covered under Original Medicare like vision, dental, hearing, transportation, and gym memberships. These extra benefits are often provided at low or no additional cost.
The exact additional benefits vary significantly between Medicare Advantage Plans. Having these extra benefits bundled into an Advantage Plan provides simplicity and cost savings compared to purchasing separate supplemental coverage.
Cost Sharing Reductions
Medicare Advantage enrollees who receive low-income subsidies from Medicare may qualify for even lower costs under Extra Help plans. These plans have smaller or no deductibles, lower copays and drug costs, and reduced premiums and out-of-pocket limits.
Medicare Advantage enrollees who receive Medicaid may also have additional cost sharing reductions through Dual Eligible Special Needs Plans. These plans coordinate Medicare and Medicaid benefits.
Comparing medicare Costs
With dozens of Medicare Advantage Plans available, it takes some work to compare costs. Evaluating monthly premiums, deductibles, copays, drug coverage, and maximum out-of-pocket limits allows you to find the optimal plan based on your budget and healthcare needs.
Plans with the lowest premiums aren’t always the best value if they have higher deductibles, copays, or annual limits. Use Medicare’s Plan Finder tool on Medicare.gov to easily compare Medicare Advantage Plan costs.
Also consider whether your doctors participate in the plan’s network. Using network providers will lower your out-of-pocket costs for services.
Average Costs of Medicare Part B
For context, here is a look at the standard costs of Original Medicare in 2023. These represent the base costs before adding supplemental coverage like Medicare Advantage or Medigap:
Part A (Hospital Insurance):
- Premium: $0 for most people
- Deductible: $1,600 per benefit period
- Copays: Up to $400 per day after 60 days in the hospital
Part B (Medical Insurance):
- Premium: $164.90/month for most beneficiaries
- Deductible: $226/year
- Coinsurance: 20% of Medicare-approved amount for most services
These costs illustrate why additional coverage through Medicare Advantage or Medigap is important – to limit your out-of-pocket costs and provide peace of mind.
- Average Medicare Advantage premiums are around $20/month
- Copays, deductibles, drug costs, and maximum out-of-pocket limits vary significantly between plans
- Medicare Advantage costs are projected to decrease in 2023 thanks to the Inflation Reduction Act
- Compare all cost factors to find the optimal Medicare Advantage Plan for your healthcare needs and budget
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