Over 26 million Medicare beneficiaries get their coverage through Medicare Advantage Plans instead of Original Medicare. These private insurance options promise expanded benefits and cost savings. But do you still have to pay your Medicare premiums if you join a Medicare Advantage Plan?
Medicare Advantage may bundle all your Part A, Part B, and often Part D benefits into one plan. However, that doesn't mean you get to skip paying Medicare premiums.
Below we’ll explain how Medicare Advantage affects your Medicare premium obligations. Discover what costs remain and what changes with Medicare Advantage.
Original Medicare Premiums
Let’s start with a quick refresher on Medicare premiums under Original Medicare:
Part A - Hospital insurance premiums are $0 for most people since you or your spouse paid Medicare payroll taxes while working.
Part B - Medical insurance premiums are a standard $170.10 per month in 2023, but may be higher depending on your income.
Part D - Prescription drug coverage requires premiums that vary by plan, typically ranging between $20 to over $100 monthly.
So under Original Medicare, most people may pay at least the Part B premium and a separate premium for Part D drug coverage. Part A is usually premium-free.
Now let’s see how joining a Medicare Advantage Plan changes (or doesn’t change) your Medicare premium obligations.
Do You Still Pay Part B Premiums?
Yes, you still pay your Part B premium every month. This does not change when you join a Medicare Advantage Plan.
The standard Part B premium for 2022 to 2023 is $170.10 if your income is under $97k individually or $194k as a couple. Higher earners pay more.
Medicare uses your Part B premiums to fund Medicare Advantage Plans. Every month, Medicare sends payments to your plan based on the standard Part B amount (or more if your income deems you pay higher premiums).
So Medicare Advantage Plans also rely on members continuing to pay their Part B premiums to operate. Your enrollment won’t cancel this obligation.
Do You Pay a Separate Part C Premium?
Usually yes. Most Medicare Advantage Plans charge an additional premium beyond your Part B amount. However, some Medicare Advantage Plans have $0 premiums.
According to the Kaiser Family Foundation, the average monthly premium for Medicare Advantage Plans is around $19 in 2023. But this can range anywhere from $0 up to over $100 depending on the plan, benefits, and location.
A Medicare Advantage Plan premium factors in projected medical claims, administration costs, profit margin, and any extra benefits offered. Plans with more benefits or in areas with higher medical costs tend to have higher premiums.
When evaluating Medicare Advantage Plans, look closely at the monthly premium since it varies widely. Some charge no premium while others charge over $100 or more per month.
What About Prescription Drug Premiums?
Most Medicare Advantage Plans integrate Medicare Part D prescription drug coverage. This means your Part D costs get bundled together with your Part B/Part C costs in one plan and one premium.
However, some Medicare Advantage Plans do not include drug coverage. With those plans, you would need to purchase a separate Part D Plan to get coverage for your prescriptions.
The Part D premium varies by plan but averages around $30 to $85 per month nationwide. Bundling this in with the rest of your coverage can offer savings and convenience compared to buying a stand-alone Part D Plan.
Additional Medicare Advantage Cost Sharing
Along with your Part B and likely Part C premiums, also consider additional out-of-pocket costs with Medicare Advantage like:
Deductible for certain covered services (usually not high)
Copays for doctor visits, hospitalization, drugs, etc.
Coinsurance percentage you pay after deductible
Your annual out-of-pocket maximum cap
Compare total costs when evaluating plans. Lower premium plans may end up more expensive if they have very high copays or other cost sharing.
Can You Get a $0 Premium Medicare Advantage Plan?
While the average monthly premium is $19, some Medicare Advantage Plans don’t charge any premium beyond your Part B amount. How can they afford to offer coverage at no additional cost?
A $0 premium Medicare Advantage Plan works by offering a smaller provider network, tighter utilization management, and fewer extra benefits. This controlled cost structure allows them to operate without passing on a monthly premium to members.
Zero premium plans appeal to retirees on tight budgets. But compare benefits carefully vs other plans. Lower premiums typically mean higher annual out-of-pocket costs or less robust coverage.
When You Don't Pay Part B Premiums
We mentioned there are limited scenarios where you can enroll in Medicare Advantage without paying Part B premiums:
If you qualify for Medicare before age 65 due to disability and your employer health plan pays your Part B premiums.
If you receive Medicaid and are a dual eligible beneficiary. Your state Medicaid program would cover your Medicare Part B premium cost.
But otherwise, all Medicare Advantage members pay their usual Part B premiums. Part B enrollment is required to join and fund these plans.
Weighing Medicare Advantage Costs
Medicare Advantage offers an alternate way to receive your Medicare benefits through private health plans. While they bundle A, B, and sometimes D coverage, you’ll still pay certain Medicare premiums and cost sharing.
Carefully compare plans on:
Monthly premiums
Prescription drug premium if separate from medical
Other out-of-pocket costs like copays and coinsurance
Total plan spending cap for the year
Evaluating Medicare Advantage means looking at the big picture including premiums, benefits, and budget protection. This gives you a complete view of value and costs.
While joining Medicare Advantage often reduces some costs, you’ll continue to pay your usual Medicare Part B premium and any income-adjusted surcharges. Plus most plans charge an additional medical premium for Part C coverage.
Weigh each piece of the cost equation when making your Medicare Advantage decision. Know your total obligations and make an informed plan choice.
We’re Here to Help
You do not have to spend hours reading articles on the internet to get answers to your Medicare questions. Give the licensed insurance agents at Next Steps Insurance a Call at (717)-271-2326. You will get the answers you seek in a matter of minutes, with no pressure and no sales pitch. We are truly here to help.
FAQs
Do I still pay Medicare Monthly premiums with a Medicare Advantage Plan?
Yes, you still need to pay your Medicare Part B premium while enrolled in a Medicare Advantage Plan. However, the amount you pay may vary depending on the specific plan you choose.
What are premiums for Medicare?
Medicare premiums refer to the monthly fees you pay to maintain your Medicare coverage. These premiums help cover the costs of certain services and benefits provided by Medicare.
Will the Medicare Advantage Plan cover my Part A and Part B benefits?
Yes, Medicare Advantage Plans generally cover the same benefits as Original Medicare, which includes Part A (hospital insurance) and Part B (medical insurance) services.
Can I still receive dental coverage with a Medicare Advantage Plan?
While Medicare Advantage Plans may offer additional benefits beyond what Original Medicare provides, dental coverage is not automatically included in all plans. It is important to review the specific details of each plan to determine if dental coverage is included or available as an optional add-on.
Will I still need to pay out-of-pocket expenses with a Medicare Advantage Plan?
Yes, Medicare Advantage Plans often require you to pay out-of-pocket costs for services. These costs can include copayments, deductibles, and coinsurance. The specific amounts will vary depending on your plan and the services you receive.
Can I enroll in a Medicare Advantage Plan for the year 2023?
Yes, you can enroll in a Medicare Advantage Plan during the annual enrollment period, which typically runs from October 15th to December 7th. This allows you to make changes to your Medicare coverage for the following year, including enrolling in a Medicare Advantage Plan.
Are Medicare Advantage Plans offered by private insurance companies?
Yes, Medicare Advantage Plans are offered by private insurance companies that are approved by Medicare. These insurance companies administer and manage the plans while still adhering to Medicare's guidelines and regulations.
What additional benefits do Medicare Advantage Plans offer?
Medicare Advantage Plans may offer additional benefits beyond what is covered by Original Medicare. These additional benefits can include prescription drug coverage, vision and hearing services, wellness programs, and more. The specific benefits will vary depending on the plan.
Can I enroll in a Medicare Supplement Plan if I have a Medicare Advantage Plan?
No, you cannot have both a Medicare Supplement (Medigap) plan and a Medicare Advantage Plan at the same time. Medigap Plans are designed to work alongside Original Medicare, not Medicare Advantage Plans.
Where can I find more information about Medicare and Medicare Advantage?
You can find more information about Medicare and Medicare Advantage Plans on the official website of the Centers for Medicare & Medicaid Services (CMS) or by contacting a licensed insurance agent who specializes in Medicare Plans.