Summary: Medicare Advantage plans can be an affordable way to get your Medicare medical benefits and often other benefits such as prescription drug, vision, dental, and hearing coverage. To find low-cost Medicare Advantage plans, compare premiums, cost-sharing arrangements, maximum out-of-pocket limits that cap your cost-sharing for the year, and extra benefits. 

In 2020, Medicare Advantage plan premiums are expected to decline 23 percent from 2018 while plan choices, benefits and enrollment continue to increase, according to the Centers of Medicare & Medicaid Services (CMS).

Medicare Advantage plans are an alternative way to get Medicare benefits and more. Offered by private insurers contracted with Medicare, Medicare Advantage plans must offer at least the same level of coverage as Medicare Part A (hospital insurance) and Part B (medical coverage). Most Medicare Advantage plans provide additional benefits, such as dental, vision, and prescription drug coverage.

Medicare Advantage plan costs vary from one plan to another. Listed below are some tips for finding low-cost Medicare Advantage plans where you live.

Compare Premiums

When you enroll in a Medicare Advantage plan, you continue to pay your Medicare Part B premium. Medicare Advantage plan cost may include an additional premium the insurer charges. Medicare Advantage plan premiums can be as low as $0 per month. The average Medicare Advantage plan premium in 2020 is around $23 per month according to CMS. This varies by region and insurer but gives you some direction to what a low-cost Medicare Advantage plan premium might be. 

Keep in mind, Medicare Advantage plans are largely a mix of health maintenance organizations (HMOs) and preferred provider organizations (PPOs). Usually, Medicare Advantage plan cost is lower for HMOs than for PPOs. The trade-off for the low-cost Medicare Advantage HMO is that you must use the plan’s network for non-emergency care or pay the full bill in most cases.

Compare cost-sharing

Another Medicare Advantage plan cost you’ll want to compare is your out-of-pocket cost for covered services. These include deductibles, copayments, and coinsurance. They vary from plan to plan.

A low-cost Medicare Advantage plan may have no annual deductible. This means you have no out-of-pocket expense before your plan starts paying its share for covered services.

A copayment is a fixed dollar amount you pay for care, such as doctor visits, diagnostic tests, and lab work.

A coinsurance is a percentage of the approved amount you pay for particular services, such as a wheelchair.

You are likely to pay more for out-of-network services than for in-network services if you enroll in a Medicare Advantage PPO plan.

Compare Maximum Out-of-Pocket (MOOP) limits

All Medicare Advantage plans must set a MOOP limit on the amount you pay in deductibles, coinsurance, and copayments during a year for covered medical services. In 2020, the MOOP for Medicare Advantage Plans is $6,700 for in-network services. Low-cost Medicare Advantage plans often set lower limits.

This limit may protect you from excessive costs if you need a lot of care. After reaching your MOOP, your Medicare Advantage plan cost drops. You have no cost-sharing for Part A or Part B services for the remainder of the year.

Compare supplemental or extra benefits

Many Medicare Advantage plans offer extra benefits Original Medicare doesn’t have. Extra benefits may include

  • Medicare Part D prescription drug coverage
  • Routine dental, vision, and or hearing coverage
  • Over-the-counter non-prescription drugs or health supplies
  • Transportation
  • Home helper assistance and/or home safety evaluations for qualified individuals
  • Gym membership

Ask yourself if you need the additional benefits. Would you have to pay for these services yourself or purchase another supplement insurance plan? If you would use these benefits, it could be a big savings to you, even if you pay slightly more in Medicare Advantage plan premium. Your savings could mean this is a low-cost Medicare Advantage plan for you.