Medicare Advantage copays and out-of-pocket costs

When it comes to health care coverage, one of the biggest concerns is your personal cost. Whether it is your monthly premium or the out-of-pocket expense each time you seek care, you want to know how much to budget.

Depending on whether you choose Original Medicare or a Medicare Advantage (MA) plan, there are a few differences in what you will pay.

Original Medicare recap

Original Medicare is a fee-for-service federal health insurance program that includes Part A (hospital coverage) and Part B (medical coverage). Prescription drug coverage is not available through Original Medicare but can be added with a Medicare Part D plan (prescription drug coverage).

With Original Medicare, you pay for services as you get them. This cost includes a deductible, which is the amount you must pay for covered Medicare-approved services and supplies before your health insurance plan starts to pay.

Once you have met your deductible, Medicare pays its share of the Medicare-approved amount for covered health care services, and you pay your share – a 20% coinsurance. Your coinsurance is the percentage you pay per health insurance claim after meeting your deductible. This cost – your deductible and coinsurance – is in addition to your monthly premium.

Learn more about Medicare: Medicare 101 webinar

Medicare Advantage

Unlike Original Medicare, MA plans are similar to traditional health care plans and can have a monthly premium, deductible, copay, coinsurance and annual out-of-pocket maximum.

Monthly premiums

Because MA plans are through Medicare-approved private health insurance companies, costs vary based on your state, carrier, benefit options and other factors. Depending on your location, a $0 Medicare Advantage premium may be available to you.

Should you enroll in a MA plan with a premium, you will pay your premium, plus the Part B premium and Part A premium if you did not qualify for premium-free Part A.

For more on premiums: Comparing Medicare, Medicare Advantage, Medigap and Medicaid

Out-of-pocket maximum

MA plans – like most other health insurance plans – come with an annual out-of-pocket maximum. This is not your deductible. Your out-of-pocket maximum is the highest yearly amount you could pay for your health care coverage before your health insurance begins covering 100% of your qualifying medical bills.

Before enrolling in an MA plan, you can review the plan’s policy for annual out-of-pocket costs, which include your out-of-pocket maximum, deductible, coinsurance and copays. This means you will know the maximum amount you could pay for health care services that year – in addition to your monthly premium.

Each year, the U.S. government sets a standard Medicare Advantage out-of-pocket maximum limit.

In contrast, Original Medicare does not include an out-of-pocket limit. While Original Medicare covers the bulk of your medical expenses, there is high-cost sharing – the more health care services you need, the more you’ll pay in Medicare out-of-pocket costs.

If you require extensive health care services throughout the year, you could be responsible for higher out-of-pocket costs.

Cost per visit

The set amount you pay for health care services when you receive care is your copayment (copay). For example, an MA plan may charge you a $25 copay every time you see your primary care provider.

You will know your plan’s copay and coinsurance policy before enrolling. This amount can be different than the copays and coinsurance under Original Medicare.

Just like Medicare, with an MA plan you will pay your full deductible before your health insurance company begins paying toward your health care claims. Once you reach your deductible, your MA plan may have a coinsurance that you will pay for health care services until you meet your annual out-of-pocket maximum.

More with MA

Because of the added benefits not covered by Original Medicare, more patients are choosing MA. To learn about your MA plan options with Sanford Health Plan, call (888) 535-4831 between 8 a.m. and 8 p.m. CT, Monday through Friday, excluding holidays, to speak with a licensed agent. Download your free guide to Sanford Health Plan Medicare Advantage plans today.

Align powered by Sanford Health Plan is a PPO with a Medicare contract. Enrollment in Align powered by Sanford Health Plan depends on contract renewal. Sanford Health Plan complies with applicable federal civil rights laws and does not discriminate on the basis of race, color, national origin, age, disability or sex.



CMS ID Number: H8385_922-444-590 ArticleCosts -PY2022-ND-SD_C, H3186_922-444-590 ArticleCosts-PY2022-MN_C Last Updated On: 3.31.23 at 10:30 AM

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