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Who pays Medicare Advantage plan premiums?

Who pays Medicare Advantage plan premiums?

September 12, 20237 min read

A Medicare Advantage Plan, sometimes called Medicare Part C, is an alternative to original or traditional Medicare provided by private insurance companies approved by Medicare. Medicare Advantage Plans are required to cover all Medicare Part A and Part B benefits, excluding hospice care. Many Medicare Advantage Plans offer extra benefits, like dental, vision, hearing aids, and more.

What is the Monthly Premium for Medicare Advantage Plans?

The monthly premium for a Medicare Advantage Plan can range from $0 up to over $300 per month. The average monthly premium for a Medicare Advantage Plan in 2022 is $19 per month. However, many plans are available with $0 premiums.

Medicare Advantage Plans with $0 premiums typically require you to use in-network providers. Plans with higher premiums often include extra benefits like dental, vision, hearing aids, transportation, and an out-of-network benefit.

How Do $0 Premium Medicare Advantage Plans Work?

Medicare pays private insurance companies a set amount per enrollee to provide Medicare Part A and  B benefits. Many Medicare Advantage Plans use some of this payment from Medicare to buy down the premium and offer a $0 monthly premium plan.

Plans can offer a $ 0 monthly premium when they are able to provide Part A, Part B, and sometimes Part D benefits while spending less per member than what Medicare pays the plan. Plans may achieve lower costs through negotiated rates with providers or managing benefits more efficiently.

The maximum amount the federal government will pay a plan for a Medicare Advantage enrollee in 2023 is $1,082 per member per month on average. So Medicare is paying the plan this monthly amount for each enrollee, even if the plan premium is $0.

Are There Any Costs with a $0 Premium Medicare Advantage Plan?

While a $0 premium Medicare Advantage Plan has no monthly premium, you'll still have to pay Medicare Part B premiums. According to centers for Medicare, Medicare Part B premiums are usually deducted from your Social Security check. The standard Part B premium is $164.90 in 2023 for most beneficiaries.

In addition to your Part B premium, a $0 premium Medicare Advantage Plan also may charge:

·        Copays or coinsurance - The amounts you pay for certain medical services like doctor visits, hospitalizations, etc. Plans also typically charge copays between $0-$50 for office visits and 20% coinsurance for other services.

·        Deductible - The amount you must pay out of pocket before the plan starts covering services, often $100-$300 per year. Many plans have a $0 deductible.

·        Out of network costs - Plans that limit you to in-network providers may charge higher costs for seeing out-of-network providers.

·        Part D drug plan premiums and costs - If you want average Medicare prescription drug coverage (Part D prescription drug), you'll pay an additional monthly premium ($0-$100 on average) plus deductibles and copays for each drug.

·        Maximum out of pocket limit - Plans have a yearly limit on your total costs for medical services, usually around $3,000-$7,000 per year. This protects you from extremely high medical costs.

While costs vary between plans, the total yearly out-of-pocket costs for services are typically lower for Medicare Advantage Plans compared to Original Medicare.

How Do Supplemental Benefits Work with Medicare Advantage?

In addition to covering all Medicare Part A and Part B benefits, many Medicare Advantage Plans include extra supplemental benefits not covered by Original Medicare. Some common supplemental benefits include:

·        Dental care - Cleanings, exams, x-rays, fillings, dentures, etc.

·        Vision care - Annual eye exam, prescription eyeglasses or contacts

·        Hearing aids - Hearing exam and hearing aids

·        Fitness membership - Gym membership or fitness tracker

·        Over-the-counter items - Allowance for OTC meds and health-related items

·        Transportation - Rides to medical appointments

·        Telehealth - Phone or video visits with providers

·        Meal delivery - After hospitalization or specific health issues

·        Personal care - In-home support services

The specific supplemental benefits included will vary by each Medicare Advantage Plan. Higher premium plans tend to offer more robust supplemental benefits.

Medicare Advantage Plans are able to offer these extra benefits because of rebates they receive from the Medicare program when their plan bids are lower than the county benchmark rate. Plans can use up to 70% of these rebate dollars to provide supplemental benefits that improve member health.

How to Pick the Right Medicare Advantage Plan

With many Medicare Advantage Plans available, it can be tricky picking the right plan. Here are a few tips:

·        Compare premiums, copays, coinsurance, deductibles, and maximum out-of-pocket costs

·        Look for $0 premium plans or low premium plans

·        Make sure your providers are in-network

·        Consider plan ratings - 4+ stars is excellent

·        Check if your medications are covered

·        Evaluate if the supplemental benefits are valuable to you

Using the Medicare Plan Finder tool on Medicare.gov can make comparing plans much easier. You can enter your medications and preferred providers to see accurate pricing and coverage information.

Medicare Advantage Open Enrollment from January 1 to March 31 each year also lets you switch Medicare Advantage Plans or go back to Original Medicare, so you have an opportunity to change plans each year.

Key Takeaways on Medicare Advantage Plan Premiums and Benefits

·        Many Medicare Advantage Plans are available with $0 monthly premiums.

·        You still have to pay your Part B premium, usually around $165/month.

·        Check for other costs like copays, deductibles, and maximum out-of-pocket limits.

·        Compare supplemental benefits like dental, vision, and more across plans.

·        Use tools on Medicare.gov to find and compare Medicare Advantage Plans in your area.

The right Medicare Advantage Plan with $0 premiums and robust supplemental benefits can offer outstanding coverage and financial protection. Evaluate all your options to find great value with Medicare Advantage.

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 Bourgeois Insurance a Call at (985) 803-8999. 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

How many Medicare beneficiaries enroll in Medicare Advantage Plans?

 Over 40% of Medicare beneficiaries enroll in Medicare Advantage Plans as an alternative to original, traditional Medicare.

What is covered by traditional Medicare vs. Medicare Advantage?

 Traditional Medicare covers Medicare Part A and Part B benefits, while Medicare Advantage Plans may or are required to cover these benefits and may offer additional benefits.

Can Medicare Advantage Plans require prior authorization?

Yes, most individual Medicare Advantage Plans require prior authorization for certain services, tests, or procedures. 

What percentage of Medicare Advantage enrollees are in 4+ star plans?

 Nearly all Medicare Advantage enrollees are in plans rated 4 stars or higher, according to data from the Centers for Medicare and Medicaid Services.

How do I enroll in a Medicare Advantage Plan?

To enroll in a Medicare Advantage Plan, you must be eligible for Medicare Parts A and B and then select and join a plan during open Medicare enrollment or special enrollment periods.

 How are Medicare Advantage Plans paid?

Medicare Advantage Plans are paid a set amount per enrollee per month by the Medicare program to provide Part A and Part B services benefits. 

Can Medicare Advantage Plans offer lower premiums?

Yes, Medicare Advantage Plans can use their payments from Medicare to offer plans with lower premiums than Original Medicare coverage.

How do I choose a Medicare Advantage Plan?

When choosing a Medicare Advantage Plan, compare costs, coverage, and quality ratings to select a plan that meets your needs. The type of plan you choose depends on your needs as premium vary.

What additional benefits may Medicare Advantage Plans include?

Many Medicare Advantage Plans type include extra benefits like dental, vision, hearing, fitness, and more that are not covered by traditional Medicare.

How do Medicare Advantage premiums and costs vary

 Medicare Advantage Plan premiums, deductibles, copays, and maximum out-of-pocket costs vary significantly between different plans.

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Plans are insured or covered by Medicare Advantage (HMO, PPO, and PFFS) organization with a Medicare contract and/or a Medicare-approved Part D sponsor. Enrollment in the plan depends on the plan’s contract renewal with Medicare. We do not offer every plan in your area. Please contact medicare.gov or 1-800-Medicare to get information on all your options.


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