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What to Know About Medicare Advantage Premiums, Costs and Coverage in 2023

What to Know About Medicare Advantage Premiums, Costs and Coverage in 2023

With over 28 million people enrolled, Medicare Advantage continues to be a popular alternative to original Medicare. When evaluating Medicare Advantage plans for 2023, it’s important to understand how these plans work when it comes to premiums, out-of-pocket costs, and coverage. This overview explains what you need to know about what you’ll pay, spend, and get with Medicare Advantage.

Monthly Premiums Vary Between Medicare Advantage Plans

Unlike original Medicare, Medicare Advantage plans can charge a monthly premium in addition to your Part B premium. However, many Medicare Advantage plans charge no premium beyond the standard Part B premium. The average monthly premium for Medicare Advantage plans is around $19 per month for 2023.

Premiums vary depending on the plan type, coverage provided, and extras offered. Local HMOs tend to have lower premiums, while private fee-for-service plans and out-of-state networks charge higher premiums. Plans with dental, vision and other benefits may also cost more.

When evaluating plans, look closely at the monthly premium along with out-of-pocket costs to understand the total expenses. Having a $0 premium plan doesn’t guarantee it’s the most affordable option for your healthcare needs.

Out-of-Pocket Spending is Capped With Medicare Advantage

One key benefit of Medicare Advantage plans is that they have an annual limit on your out-of-pocket spending for Part A and Part B covered services. Once you hit this maximum, you’ll pay nothing for covered care the remainder of the year.

For 2023, the out-of-pocket maximum cannot exceed $8,300. Many plans have maximums well below this amount, such as $5,000 or less. This cap on spending makes costs more predictable compared to original Medicare.

Deductibles, copays and coinsurance for Medicare covered services count towards the out-of-pocket limit. Your monthly premium payments do not count towards this limit, however.

Medicare Advantage Plans Cover All Services Original Medicare Does

Medicare Advantage plans must cover all of the services that original Medicare (Part A and Part B) covers. This includes:

  • Doctor visits
  • Preventive care
  • Hospitalization
  • Lab tests
  • Medical equipment
  • Home health
  • Many prescription drugs

If you join a Medicare Advantage Plan, Medicare pays the plan to provide your coverage rather than paying providers directly for fee-for-service Medicare benefits.

Plans aren’t allowed to charge more for Part A and Part B services than original Medicare does. The care and benefits you receive will be similar whether you have traditional Medicare or a Medicare Advantage plan.

Many Plans Offer Additional Telehealth, Dental and More

The majority of Medicare Advantage plans include dental, vision, hearing benefits and more that aren’t part of original Medicare. For instance:

  • Routine eye exams and glasses coverage
  • Dental cleanings, x-rays, extractions, etc.
  • Hearing aid allowances
  • $0 copay or low-cost transportation
  • Wellness programs like gym memberships
  • Over-the-counter medication allowances
  • Telehealth benefits with low or no copays

These extra benefits are a major reason Medicare Advantage enrollment has grown. Review options to find a plan matching your healthcare and budget needs.

How Medicare Advantage Plans Are Paid

Medicare pays Medicare Advantage plans a fixed fee per member per month to provide care, an amount determined by a competitive bidding process. For 2023, the average monthly payment is $1,100 per medicare enrollment.

Plans are paid more for sicker beneficiaries expected to have higher costs. Payments are adjusted based on demographics, diagnoses, and risk profiles. This capitated reimbursement model incentivizes plans to control unnecessary costs.

Plans use the payments to create provider networks, establish premiums and cost sharing, and fund enhanced benefits. The set monthly fee covers all Part A and Part B services.

Key Takeaways

  • Medicare Advantage premiums vary by plan but average around $19 per month for 2023
  • Plans cap annual out-of-pocket spending for Medicare covered care, normally under $5,000
  • Medicare Advantage plans must cover all services original Medicare does without extra charges
  • Many plans include dental, vision, hearing, telehealth and other enhanced benefits
  • Medicare pays plans a monthly per-member fee to provide all your Part A and Part B coverage

Carefully compare all costs along with coverage details and network providers when reviewing Medicare Advantage plans during open enrollment.

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Who pays medicare advantage premiums?

The premiums for Medicare Advantage plans are typically paid by the individuals enrolled in the plans. However, in some cases, there may be assistance available for those who qualify, such as low-income subsidy programs.

What is traditional Medicare?

 Traditional Medicare refers to the original Medicare program offered by the Centers for Medicare and Medicaid Services (CMS). It includes Medicare Part A (hospital insurance) and Part B (medical insurance).

What changes will occur in 2023 regarding Medicare Advantage?

 It is difficult to predict specific changes that will occur in 2023, as average Medicare Advantage plans can vary each year depends on type of plan. However, there may be updates to plan offerings, coverage benefits, and premiums.

Are there Medicare Advantage plans with a $0 monthly premium?

Yes, some Medicare Advantage plans may have a $0 monthly premium. These plans are subsidized by the government and typically require individuals to still pay their Medicare Part B premium.

What are supplemental benefits in Medicare Advantage?

 Supplemental benefits in Medicare Advantage plans are additional services or coverage that go beyond what is provided by traditional Medicare. These can include vision, dental, hearing, and fitness benefits, among others.

Does Medicare Advantage cover all of my healthcare costs?

 Medicare Advantage plans generally provide coverage for a wide range of healthcare costs, but you may still be responsible for certain out-of-pocket expenses such as copayments, deductibles, and coinsurance.

Do all Medicare Advantage plans have a premium?

 No, not all Medicare Advantage plans charge a premium. Some plans may have a $ 0 monthly premium, while others such as medicare part c may have a monthly premium that varies depending on the specific plan and insurance company.

Can Medicare Advantage plans offer prescription drug coverage?

 Yes, many Medicare Advantage plans also include part d prescription drug coverage, also known as Medicare Part D drug plan. This can help individuals save on their medication costs.

Are Medicare Advantage plans offered by insurance companies?

Yes, Medicare Advantage plans available are offered by private insurance companies that are approved by the Medicare program.

Do I still have to pay the Medicare Part B premium if I enroll in a Medicare Advantage plan?

Yes, individuals who enroll in a Medicare Advantage plan must still pay their Medicare Part B premium in addition to any premium associated with the Advantage plan.

How do premiums for individual Medicare Advantage plans compare to traditional Medicare spending?

Nearly all Medicare Advantage enrollees must pay monthly premiums in addition to the Medicare Part B premium, while people with Medicare who are eligible for traditional Medicare typically only pay Part B premiums. Premiums for Medicare Advantage plans may be higher or lower than a person’s expected traditional Medicare spending depending on the individual’s healthcare needs and the benefits offered by different plans. 

What services are covered by Medicare Advantage plans?

In addition to covering all of Medicare Part A and most of Part B medical benefits, many Medicare Advantage plans offer additional benefits like preventive care, telehealth services, and even dental or vision coverage. However, some benefits and services covered by traditional Medicare require prior authorization from the private insurer offering the Medicare Advantage plan. 

Do Medicare Advantage plans have an out-of-pocket limit on costs for the year like traditional Medicare?  

Like traditional Medicare, nearly all Medicare Advantage plans have a yearly limit on the maximum amount enrollees have to pay out-of-pocket for medical services received that year, not including premiums. In 2023, the average out-of-pocket limit for Medicare Advantage plans is $7,500, compared to $8,300 for someone enrolled in traditional Medicare Parts A and B.

How are Medicare Advantage plans paid?

Private insurers that provide Medicare Advantage plans are paid a set monthly fee by the Centers for Medicare and Medicaid Services for each Medicare beneficiary enrolled in their plan. This fee paid by CMS to the Medicare Advantage plans may be higher or lower than traditional Medicare payments depending on the enrollee’s healthcare risks and plan offerings.

Can people with Medicare choose any Medicare Advantage plan?

While people with Medicare have the choice to enroll in any Medicare Advantage plan that is available in their area and offered by a private insurer contracting with Medicare, some more specialized plans called Special Needs Plans may have additional eligibility requirements beyond being eligible for Medicare and Medicaid services. Plan networks and options also vary depending on location.

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