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Cost is an important component to consider when it comes to selecting a Medicare plan. It’s critical to choose a plan that delivers great coverage and fits your budget to get the most out of your plan and avoid any unexpected hassles or expenses.

Curious about how much Medicare will cost you in 2022? Here's a brief guide to understanding premiums, deductibles, and more.

How Much Does Medicare Cost?

There are several factors that weigh into the costs associated with Medicare, and they all depend on the level of coverage you choose to receive.

Original Medicare, which includes Part A coverage (hospital care, skilled nursing facility care, home health care, and hospice care) and Part B coverage (doctor visits, lab tests, screenings, medical equipment, ambulance transportation, and other outpatient services) requires payments in the form of monthly premiums, annual deductibles, copays, and coinsurance.

Premiums: A premium is the amount you pay for your health plan each month. If you or your spouse have paid Medicare taxes throughout your life, you likely won’t need to pay a premium for Part A. In 2022, the Medicare Part B monthly premium is $170.10. The average 2022 premium for Part D coverage will be $33 per month.

Deductibles: A deductible is the amount you pay before your plan starts to pay. The Part A deductible in 2022 is $1,556 per benefit period. (A “benefit period” begins when you enter a hospital or skilled nursing facility and ends after you have been out for 60 consecutive days.) In 2022, the Medicare Part B deductible is $233 per benefit period.

Coinsurance: Coinsurance is the percentage of costs of a covered health care service you pay after meeting your deductible. For Part A, the coinsurance is $0 for days 1 through 60 and increases after that. For Part B, you typically pay 20% of the Medicare-approved cost of most doctor services, medical equipment, and outpatient therapy.

If you need more information on what the different Medicare parts cover or would like a refresher on the ins and outs of Medicare, call Advise at (833) 923-1869 (TTY: 711), 8 a.m. – 8 p.m. EST, M-F to request our free guidebook, Unlock Your Medicare.

How Much Does Medicare Advantage Cost?

Medicare Advantage plans, otherwise known as Medicare Part C, are offered through private insurers and have their own costs. However, because you must first enroll in Medicare Part A and Part B before you can enroll in Medicare Advantage, you still need to pay the costs associated with those two parts of Medicare.

Medicare Advantage plans may have their own premiums, but many do not—in fact, nearly two-thirds of Medicare Advantage enrollees pay no additional premium (1). It’s important to double check premium costs before enrolling in any plan. Some Medicare Advantage plans may even help pay your Part B premium, but you need to read the details carefully or speak with an expert to understand how much is covered.

Depending on the coverage included within your Medicare Advantage plan, you may have to pay higher out-of-pocket fees. Plans that include vision, dental, hearing, and Part D (prescription drugs) coverage may have higher costs. These costs vary depending on the type of Medicare Advantage plan you choose. 

Here’s a rundown on the types of Medicare Advantage plans available: 

  • Health Maintenance Organization (HMO) plans require you to obtain health care services within their network unless it’s an emergency. If you receive routine care from a provider outside the plan’s network, the costs will not be covered, and you will have to pay entirely out of pocket.
  • Preferred Provider Organizations (PPO) plans are a bit more flexible. They allow you to visit any doctor who accepts your plan, but you may pay less when you visit a provider from within your network. Regardless, the providers and health care services outside of your network will typically have higher cost sharing.
  • Special Needs Plans (SNPs) are made for groups of people with specialized health care circumstances, such as those with Medicare and Medicaid, people living in nursing homes, or those with certain chronic medical conditions, and have varying costs. You’ll want to make sure you understand the details of these plans if you qualify for them. 
  • Private Fee-for-Service (PFFS) Plans are the most like Medicare, where you can go to any doctor, provider, or hospital if they accept the plan’s payment terms.
  • HMO Point-of-Service (HMO-POS) plans may allow you to get some services out-of-network for a higher cost.

Medicaid can help cover Medicare Advantage costs as well. Medicaid is a joint federal and state program that helps with medical costs for those with limited income and resources. Even if you think you don’t qualify for Medicaid, there are circumstances that let you access it through “spending down” and subtracting medical costs from your income, which is worth looking into. 

Additional Medicare Advantage Considerations

Coinsurance and Copays: For visits with doctors and specialists, you’ll typically have to pay coinsurance costs, a percentage of the cost of the covered health care service you received. These may be replaced by copayments, which are fixed amounts you pay for each visit with a medical professional. Medicare Advantage plans typically have copays as opposed to coinsurance. Unlike Original Medicare, Medicare Advantage plans have out-of-pocket limits for covered medical services.

Care Preferences: It’s important to understand what types of medical services you require and how often you require them. You may wish to continue seeing a doctor or network of providers you trust after enrolling in Medicare. You can use Original Medicare to visit any provider who accepts Medicare. If you enroll in a Medicare Advantage plan, you will want to make sure the plan you choose contracts with your preferred provider. If you visit the doctor often or have a chronic condition, you may end up paying lower costs if you have a Medicare Advantage plan.

Prescription Drug Costs: Beyond the costs associated with doctor visits, you may also have to pay out of pocket for prescription drugs.

Network Preferences: Health networks are incredibly important to understand when considering a Medicare Advantage plan. You must make sure your preferred doctors and pharmacies are in your plan’s network. If you aren’t sure how to verify which doctors are in your network, a Medicare expert can help.

When you schedule a free consultation with Advise, we will tell you which plans your doctor is contracted with and compare the costs and benefits of each. Call (833) 923-1869 (TTY: 711), 8 a.m. – 8 p.m. EST, M-F to book your free consultation today.

The Final Costs of Medicare Advantage

There are many different factors to consider and types of coverage to choose from, which makes it tricky to determine exactly what your Medicare Advantage costs will be. The best way to keep costs down is to stay within your network of providers. 

Research has shown that over the last five years, Medicare Advantage premiums have been slowly dropping. 42% of Medicare beneficiaries are enrolled in Medicare Advantage plans, more than doubling (MA) enrollments over the past decade (2). With enrollments increasing, premiums go down. Thanks to these lowered premiums, more and more Americans are accessing the comprehensive health care coverage they benefit from the most.

 

(1) “Medicare Advantage in 2021: Premiums, Cost Sharing, out-of-Pocket Limits and Supplemental Benefits.” KFF, 29 July 2021, https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2021-premiums-cost-sharing-out-of-pocket-limits-and-supplemental-benefits/.

(2) “Medicare Advantage in 2021: Enrollment Update and Key Trends.” KFF, 24 June 2021, https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2021-enrollment-update-and-key-trends/.

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Your safety is our priority. We offer Medicare educational events in person, online, or by phone so you can choose what’s right for you. In-person events will comply with COVID-19 health guidelines to keep attendees safe, including use of hand sanitizer and social distancing measures.

For accommodations of persons with special needs at meetings call (855) 699-4239 (TTY: 711).

This information is not a complete description of benefits. Call (855) 699-4239 (TTY: 711) for more information.

ATENCIÓN: Si habla español, tiene a su disposición servicios gratuitos de asistencia lingüística. Llame al (844) 961-3952 (TTY: 711).

Medicare beneficiaries may also enroll in Medicare Advantage plans through the CMS Medicare Online Enrollment Center located at http://www.medicare.gov.

For a complete list of available plans please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov.

 

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