What Are the Costs of Medicare Advantage?

Offered through private health plans, Medicare Advantage (also known as Part C) gives you an alternative way to receive your Medicare coverage. Like with original Medicare (Parts A and B), Medicare Advantage is not free—you will be responsible for paying certain costs yourself. These are often referred to as “out of pocket” costs and include premiums, deductibles, coinsurance, and copayments.

Here’s what you should expect to pay out of pocket in 2024 if you’re enrolled in a Medicare Advantage plan.

What are Medicare Advantage (Part C) premiums for 2024?

Premiums are the amount you pay each month out-of-pocket for your Medicare Advantage plan. The estimated average monthly Medicare Advantage plan premium for 2024 is $18.50, but this cost may vary based on the insurer and level of coverage. Some plan premiums could be $0, while others could be $200 or more.

To join a Medicare Advantage plan, you must also be enrolled in Medicare Parts A and B. Part B has a separate premium that you must pay even if you enroll in a Medicare Advantage plan. The standard Part B premium in 2024 is $174.70 per month. You may pay more if you delayed enrolling into Medicare Part B and have a penalty, have higher income, and/or have fewer than 40 Social Security work credits.

What are the deductibles for Medicare Advantage?

A deductible is the amount you must pay before your Medicare benefits kick in. Only some Medicare Advantage plans have an annual deductible. However, many Medicare Advantage plans that include Part D/prescription drug coverage may charge a separate deductible for drug coverage.

Are there copayments (or coinsurance) for Medicare Advantage? 

Copayments/coinsurance are the portion of costs you pay for covered drugs or services like doctor visits. Copayments are usually a flat fee, while coinsurance is generally a percentage of the cost of the item or service. For example, a 25% coinsurance means you are responsible for 25% of the total cost, while the plan covers 75% of the total cost. Keep in mind Medicare Advantage plans often charge higher copayment and coinsurance amounts for out-of-network providers.

Are there maximum out-of-pocket costs for Medicare Advantage in 2024? 

Medicare Advantage out-of-pocket costs can vary by plan and change every year. But all Part C plans have a maximum out-of-pocket spending limit. In 2024, the maximum you will spend is $8,850 (some plans may have lower limits). This limit is designed to protect you from excessive costs if you have an injury or illness and your medical expenses are high.

If your Medicare Advantage plan allows you to see out-of-network providers, it may have a separate out-of-network, out-of-pocket spending limit that’s higher. Additionally, if your plan includes prescription drug coverage, you will have a separate out-of-pocket maximum for prescription drug costs

Are there additional considerations when choosing a Medicare Advantage plan?

When you’re comparing Medicare Advantage plans, keep the following in mind:

• If you’re enrolled in a Medicare Advantage plan that operates as a health maintenance organization (HMO), you’ll need a referral from your primary care physician to visit a specialist. There will be a separate copayment for that appointment.
• If you’re enrolled in an HMO, be sure that any specialist you see refers you to an in-network lab or testing facility.
• If you’re enrolled in a Medicare Advantage Special Needs Plan (SNP), most of your out-of-pocket costs are typically covered by Medicare and Medicaid.

Enrolling in a Medicare plan is a big decision—and NCOA is here to help you make the right one during Open Enrollment (Oct. 15-Dec. 7). Review our practical tips for choosing a Medicare plan—or learn how to connect with a licensed Medicare broker that meets NCOA’s Standards of Excellence.