The Cost of Medicare Advantage Plans

When you are shopping for a Medicare Advantage plan, you may consider features such as a plan’s range of benefits and possible network rules. But above all else, perhaps the biggest thing you might consider is the cost of a plan. 

When it comes to Original Medicare (Medicare Part A and Part B), the cost of premiums is standardized across the board. But because Medicare Advantage is privatized, costs can vary from one plan or coverage area to another. Let’s take a closer look at the cost of Medicare Advantage plans and how they fit into one’s health insurance spending.

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Average cost of Medicare Advantage plans

In 2019, the average Medicare Advantage plan premium for plans that offer prescription drug coverage will be $40 per month.1

A closer look at 2018 data also reveals:2

  • Florida had the lowest average monthly premium at $3.34 per enrollee, followed by Iowa ($7.62) and Arizona ($8.63).
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  • Three states had average premiums per enrollee of more than $90 per month:  Massachusetts ($96.58), North Dakota ($104.04) and Minnesota ($131.73).
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  • All but two states (Alaska and Wyoming) offered at least one $0 monthly premium Medicare Advantage plan. $0 premium plans may not be available in all locations within each state.

In addition to premiums, many Medicare Advantage plans typically include some out-of-pocket expenses. These can include plan deductibles, copayments or coinsurance and an out-of-pocket spending maximum.  

Factors that can influence cost

The coverage offered by each Medicare Advantage plan may differ. While a Medicare Advantage plan by law must cover the same benefits as Medicare Part A and Medicare Part B, benefits like prescription drugs, dental, vision and hearing can be covered at varying degrees (or not at all).

Also, as with the cost of many products and services, the differing local and regional market where you live can have an effect on the cost of Medicare Advantage plan available to you. 

Aside from the benefits offered and where you live, there are several additional factors that can influence the cost of a Medicare Advantage plan, such as: 

  • Whether or not the plan pays any of your Medicare Part B premium
    When enrolled in a Medicare Advantage plan, you must also continue to pay your premium for Medicare Part B. Some Medicare Advantage plans can cover a portion of the Part B premium for you and may account for that by charging a higher premium for the plan.
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  • The amount (if any) of the yearly deductible
    Many Medicare Advantage plans include annual deductibles. The amount of the deductible can have an effect on the cost of plan premiums.
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  • The amount you are required to pay for each health care visit or service
    Medicare Advantage plans typically include cost-sharing measures such as copayments and coinsurance, and the amounts of these costs can correlate with that of the premium.  
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  • The type of plan
    There are several types of Medicare Advantage plans, such as HMO, PPO and Private Fee-For-Service (PFFS) plans, as well as Medicare Savings Accounts (MSA). The type of Medicare Advantage plan you enroll in can affect which health care providers you can see and at what cost, and it can also affect the amount you might pay in premiums.
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  • Whether or not you receive any cost assistance
    There are a few ways (detailed below) in which you may be able to receive some help paying for a Medicare Advantage plan.

Medicare Advantage vs. dental, vision and hearing plans

Coverage for dental, vision and hearing care are additional benefits that Medicare Advantage plans may offer and which are not covered by Original Medicare. So how does the cost of a Medicare Advantage plan compare to individual plans for these benefit areas? 

  • Dental plans
    A typical standalone dental insurance plan can cost around $350 per year (roughly $30 per month).3
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  • Vision plans
    Vision insurance can typically cost around $20 per month or less.4 
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  • Hearing plans
    Unlike dental and vision insurance, hearing insurance plans are not a common insurance product. Some hearing aid companies may offer extended warranties, but the warranties apply only to the hearing aid product itself. Any medical care related to your hearing will either be covered under another health insurance plan or paid out of pocket.   

Original Medicare coverage

Original Medicare does not cover routine eye exams for glasses or contact lenses. It does cover some vision tests and procedures, but only for people who have or are at risk for certain conditions. 

Original Medicare does not cover common dental treatments, procedures or supplies. Routine cleanings or fillings are also not covered. Medicare Part A will only cover certain dental services in the event that you receive emergency or complicated dental care while admitted to a hospital.

Original Medicare also does not cover hearing exams or hearing aids and will only cover diagnostic hearing or balance exams if your doctor orders the tests to determine if you need treatment. 

For these reasons, many people may decide to opt for a Medicare Advantage plan that offers more benefits than Original Medicare.

Saving money with Medicare Advantage

After familiarizing yourself with the costs of Medicare Advantage, it may be helpful to learn more about a few ways to save on some potential plan costs. 

  • If you qualify for Medicaid, your Medicaid benefits can be used to help pay your Medicare Advantage premiums.
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  • A Medicare Savings Account (MSA) is a type of Medicare Advantage plan that deposits money into a savings account that can be used to pay for out-of-pocket expenses prior to meeting your deductible.
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  • If your Medicare Advantage plan includes a doctor and/or pharmacy network, you can save a considerable amount of money by staying within that network when receiving services.
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  • Some Medicare Advantage plans may include extra health perks such as gym memberships. There is even the possibility of Medicare Advantage plans soon covering expenses like the cost of air conditioners, home-delivered meals and transportation.

Working with a licensed insurance agent can help you find a plan in your area that suits your health care needs.

To shop for Medicare Advantage plans in your area or to learn more about the costs associated with this type of coverage, call  TTY Users: 711 today to speak with a licensed insurance agent.

 

1 Kaiser Family Foundation. Medicare Advantage 2019 Spotlight: First Look. (Oct. 16, 2018). Retrieved from www.kff.org/report-section/medicare-advantage-2019-spotlight-first-look-data-note.

2 MedicareAdvantage.com’s internal analysis of CMS 2018 Medicare Advantage Landscape Source Files. May 2018.

3 Digiacomo, Robert. Is dental insurance worth the cost? (May 25, 2017). Bankrate. Retrieved from https://www.bankrate.com/finance/insurance/dental-insurance-1.aspx.

4 Glover, Lacie. Vision Insurance: Costs, Benefits and Who Needs It. (Dec. 21, 2016). NerdWallet. Retrieved from https://www.nerdwallet.com/blog/health/vision-insurance/#2.

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MedicareAdvantage.com is a website owned and operated by TZ Insurance Solutions LLC. TZ Insurance Solutions LLC and TruBridge, Inc. represent Medicare Advantage Organizations and Prescription Drug Plans having Medicare contracts; enrollment in any plan depends upon contract renewal.

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