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Medicare Advantage Plans often offer more benefits than Original Medicare and have lower out-of-pocket costs than the Original Medicare plan. Your health insurance rate and out-of-pocket costs will depend on your particular Medicare Advantage Plan. Some plans charge monthly premiums and many plans have a yearly deductible. Other Medicare costs include copays for each doctor or hospital visit and premiums for optional benefits, such as vision, hearing or wellness coverage.
When you enroll in a Medicare Advantage Plan you are required to pay your standard monthly Medicare premiums for Part B coverage. Part B Medicare premiums must be paid directly to Medicare. The monthly cost is based on your filing status and annual household income. In addition to the Part B premium, Medicare Advantage Plans often charge a monthly health premium for the extra benefits offered by the plan. Some plans also charge a monthly drug premium for added prescription coverage. These monthly premiums can range from less than $25 to more than $200. A detailed comparison of the plans available in your area will help you control your Medicare costs.
Health insurance rates are often based partly on each health plan's yearly deductible. Most Medicare Advantage Plans require you to meet a health plan deductible before your coinsurance takes effect. These deductibles may range from $500 to several thousand dollars. Some Medicare Advantage Plans also include an annual drug deductible of several hundred dollars. Higher annual deductibles often mean lower monthly Medicare premiums. If you are worried about your Medicare costs, it is important to consider whether a higher monthly premium or a higher annual deductible will save you the most money. Typically, if you are ill or fall sick often, a higher monthly premium with a lower annual deductible will save you the most money in the long run. If you are not diagnosed with an illness and do not get sick very often, you may be able to save money with a lower monthly premium and a high deductible, since you would only need to pay in to the deductible if you needed medical treatment.
Medicare copays can vary drastically between plans. Some plans charge copays for doctors' visits, hospital stays, ambulance rides, and/or visits to the emergency room. Copays are sometimes structured on a two or three-tier system, in which visits to your primary care physician have a lower copay than a visit to a specialist. Emergency care copays, if applicable, are often the most expensive. A detailed review of your particular Medicare Advantage Plan will explain your plan's particular copay structure. Some plans also charge a copay for prescription drugs, which may only take effect after you have met your yearly drug deductible (if you have one).
There are often additional Medicare costs that you will be required to pay for particular services and medical treatments such as labs, x-rays, chemotherapy, dialysis, etc. When these services and treatments are medically needed, you will usually be required to pay the full amount charged by the provider until you meet your annual health deductible. Once the deductible is met, you will pay your coinsurance rate, which is a percentage of the fee charged. Your portion of the fee can range anywhere from 0 % to 50 %, but often falls between 20 and 30 % in-network. If your plan allows you to use an out-of-network provider and you choose to do so, your portion of the fee could be substantially higher than usual.
If your Medicare Advantage Plan includes prescription coverage, you may have to pay an additional monthly premium and/or meet an annual drug deductible before you begin to see cost-saving benefits. Once your drug deductible is met, your prescription costs may be calculated on either a copay or a coinsurance system. Some systems are set up on a tiered level system, which means you would pay different amounts depending on the type of drug you medically needed. For example, if your plan has a three-tier copay system, you may be charged $10 for each generic drug, $25 for each brand name drug, and $35 or $50 for each specialty drug. If your plan has a coinsurance system, you may be responsible for 20% - 33% of each drug's full price.
Another aspect that affects your health insurance rates and how much you pay for services under a Medicare Advantage Plan is each plan's out-of-pocket spending limit. This is an annual cap that dictates the maximum amount of money you can pay out-of-pocket each year for health care services. This amount can vary drastically between plans. Some plans may have an annual cap of $500 while others come closer to $10,000. It is important to note that most annual out-of-pocket spending limits apply only to in-network Medicare providers. If you choose to go out of network for services, you may either be subject to a higher out-of-network annual out-of-pocket maximum or your payments may not be figured into your annual expenditures at all. For example, a current Humana Choice Medicare Advantage Plan has an annual out-of-pocket spending limit of $5,000 for in-network services and a separate out-of-pocket spending limit of $7,500 for out-of-network services. This means that if you obtained services from both in-network and out-of-network providers you would be contributing to two different annual spending limits.
For more information on health insurance rates or Medicare premiums, review the particular Medicare costs of the plans in your area.