How Much Does Medicare Advantage (Part C) Cost Beneficiaries?

April 11, 2017

How much does Medicare Advantage cost?

Medicare Advantage plans (Part C) have a monthly premium that’s in addition to your Medicare Part B premium.
Many plans have a $0 cost. This simply means that your Medicare Part B premium covers the full amount.
Some plans charge an additional premium in the range of $10 to nearly $400 per month.
Each plan’s premium is based on government subsidy, additional services, and delivery cost based on the type of plan, size of network, local costs, etc.

How Medicare Advantage Works

Medicare Advantage plans are not a one-size-fits-all solution, like Original Medicare. Private health insurers and healthcare systems that Part C plans are free to add health benefits that Original Medicare (Parts A and B) do not cover. The most common addition benefit is prescription drug coverage. As a result, what you pay for Medicare Advantage (MA) depends on the type of insurance plan you choose.

The most common choices are preferred provider organization (PPO) plans, health maintenance organization (HMO) plans, and private-fee-for-service (PFFS) plans. Other types include medical savings account (MSA) and Medicare Cost plans, however, these are less common.

Common Advantage Plan Additional Benefits that add Cost

Part C plans must provide all of the health coverage built into Part A and Part B. However, these services are provided by private insurance companies approved by Medicare. In addition to what’s covered by Original Medicare, many private plans include:

Prescription benefits (within the Part D requirements)
Vision
Dental
Hearing
Health/wellness programs, like Silver Sneakers.

Premium Cost Factors

Premium costs vary widely based on several factors:

Annual maximum out-of-pocket (MOOP) amount;
Beneficiary co-payments and/or co-insurances;
Value of additional services; and
Level of choice (e.g., selection of doctors and service providers) offered to beneficiary.

Beneficiaries should know that Advantage plans are subsidized by the federal government. So, in addition to the monthly premium a members pays for their plan, the federal government pays a fixed amount each month on behalf of the beneficiary.

NOTE: Plans with a 5-star rating are paid a bonus amount for each beneficiary enrolled in a 5-star plan.

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