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Medicare Part C Costs -
Medicare Advantage Plans

What is the cost of a Medicare Advantage plan?

Most Medicare Advantage plans use a combination of deductibles, coinsurance and copayments to share costs with you. These cost-sharing arrangements will usually apply to all of the services the plan covers—hospital stays, doctor visits, drug coverage if you have it and so on.

The company that offers the plan sets the premium, if any, and decides on the cost sharing. You need to look at the details of each plan you’re considering to fully understand the costs. You can get specific information about plans you’re interested in from the companies offering them.

Medicare Advantage Costs

Premium

  • You continue to pay your Medicare Part B premium to Medicare (and your Part A premium, if you have one). Plans may or may not charge a separate premium that you pay to the plan. Premiums for Medicare Advantage plans can vary widely.

Deductible

  • Some plans charge an annual deductible, and some don’t.

Copayment

  • Many plans charge copayments for the services and benefits you use.

Coinsurance

  • Medicare Advantage plans set their own coinsurance terms and percentages. Some services may require coinsurance instead of a copayment.

All Medicare Advantage plans are required to protect you from high cost sharing by limiting the amount you may have to pay out-of-pocket for Part A and Part B services each year. The limit may be different for different Medicare Advantage plans.

Keep in mind, there is no out-of-pocket maximum limit with Original Medicare (Part A and Part B).

How does Medicare Advantage cost sharing work?

You will need to investigate the details of each plan to get the full story on its cost sharing. Plans vary widely, and their cost sharing usually works quite differently from the cost sharing used in Original Medicare (Parts A and B).

For example, under Medicare Part A, your cost sharing for a five-day hospital stay in 2014 would be your $1,216 deductible. With a Medicare Advantage plan, you might pay a $150 per day copay for each day in the hospital. This is just an example.

Cost-sharing terms and amounts vary from plan to plan. When researching Medicare costs, you’ll need to shop around for a plan that best fits your needs.

Here are some patient stories that show how cost sharing might work in different situations. The amounts shown are only for illustration purposes. Your actual costs may be different.

Michael Maria William

Michael’s story: Coordinated care in-network office visit

Michael has a coordinated care Health
Maintenance Organization (HMO) plan.
He visits an in-network doctor.

Office visit$100

Copay for office visit$10

Total Michael pays $10

Maria’s story: Brief hospital stay

Maria stays in the hospital three days, goes
home for a week, and then spends four more
days in the hospital. Her coordinated care plan
has a $150 copay for each day of a hospital stay.

Days 1 to 3 copays for first stay $450

Days 1 to 4 copays for second stay$600

Total Maria pays $1.050

William’s story: Long hospital stay

William stays in the hospital 185 days. His coordinated care plan applies a $150 per day copay for each day of a hospital stay and puts a $3,000 maximum, or cap, on out-of-pocket spending.

Days 1 to 20 (20 days at $150 per day) $3,000

Day 21 to 185 (after the cap is reached) $0

Total William pays $3,000

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