Medicare Advantage (Part C) plans often have a low or $0 monthly premium. That sounds like a good deal when you’re on a budget. However, you’ll still be responsible for a number of expenses. Make sure you understand what the total cost could be, and how it relates to the coverage you receive.
A monthly premium is the fee you pay to the plan in exchange for coverage. Each Medicare Advantage (Part C) plan has a set monthly premium. Some plans have a low or even $0 monthly premium.
An annual deductible is the amount you pay out-of-pocket for your health care before your plan begins to pay. It’s a pre-set, fixed cost. Most Medicare Advantage plans have a separate medical and prescription drug deductible.
A copayment (also known as a copay) is a kind of cost sharing. You pay a predictable, pre-set amount for a covered medical service. For example, some plans might charge a $30 copay every time you see your doctor.
Coinsurance is another kind of cost sharing you may have. You pay a percentage of the total cost for a covered medical service. Your plan pays the remaining amount owed. For example, your plan might pay 75% and your share would be 25%.
Medicare Advantage plans have a limit on how much you have to pay every year. Once you reach the annual out-of-pocket limit – also known as an out-of-pocket maximum or out-of-pocket max – you pay nothing more for all Medicare-approved expenses for the rest of the plan year.
Your monthly premium doesn’t count toward your out-of-pocket limit, but these costs generally do:
- Plan deductible
While extra coverage may mean an additional cost up front, it could save you money in the long run. When comparing plans, consider the following items:
Added Benefits and Services
Do you need extra coverage like dental, hearing, or vision care? Some plans include extra benefits for no extra cost. Some offer them as plan “riders” for an additional monthly fee. Look for a plan that meets your budget and helps you save money on the benefits and services you need.
Prescription Drug Coverage
Most Medicare Advantage plans include Medicare prescription drug coverage. This is known as an MAPD plan. In fact, the monthly premium for an MAPD plan is often less than a prescription drug plan alone. Check the plan’s drug list (formulary) to make sure your prescriptions are covered and find out how much they’ll cost.
Network of Doctors and Hospitals
Many Medicare Advantage plans have a network of covered doctors and hospitals. Depending on the plan, you may have more or less flexibility to see your own doctor. Generally, you’ll pay less out-of-pocket if you go to a doctor that’s in your plan’s network.
Total Out-of-Pocket Costs
Just because a Medicare Advantage plan has a low premium, doesn’t mean it’s the most cost-effective plan for you. Weigh each plan’s costs and benefits according to your own needs.
If you want the added benefits of a Medicare Advantage plan, but need help covering the costs, there may be help for you. Medicare Special Needs Plans (SNPs) are Medicare Advantage plans for people who are eligible for Medicare and have certain financial or healthcare needs.
Features and Benefits of Special Needs Plans
Eligibility for a SNP is based on qualifications set by federal law. Each SNP offers benefits that go beyond Original Medicare. SNPs offer the following benefits:
- Offer benefits specific to a condition, disease or living situation
- Always include prescription drug coverage
- May offer additional benefits, similar to Medicare Advantage plans
Special Needs Plan Types
There are four Special Needs Plan types. All offer specialized benefits.
- Dual-Eligible Special Needs Plans (DSNPs)
You have both Medicare and Medicaid (called “dual eligible”).
- Chronic Special Needs Plans (CSNPs)
You live with severe or disabling chronic conditions.
- Institutional Special Needs Plans (ISNPs)
You live in a skilled nursing facility.
- Institutional-Equivalent Special Needs Plans (IESNPs)
You live in a contracted assisted living facility and need the same kind of care as those who live in a skilled nursing facility.