Understanding Medicare Advantage Costs | Budget Confidently
Navigate the various costs associated with Medicare Advantage plans and learn how to budget for your healthcare expenses effectively.
Monthly Premium
The monthly premium is what you pay each month for your Medicare Advantage plan, in addition to your Medicare Part B premium.
- $0 Premium Plans: Many Medicare Advantage plans have $0 monthly premiums
- Low-Premium Options: Plans with small monthly premiums often offer additional benefits
- Payment Methods: Premiums can be deducted from Social Security or paid directly
Deductibles
Medical Deductible
The amount you pay for medical services before your plan starts to pay.
- Ranges from $0 to several hundred dollars
- Some services may be exempt from the deductible
- Resets annually on January 1st
Drug Deductible
The amount you pay for prescription drugs before coverage begins.
- Maximum allowed: $545 in 2025
- Many plans have $0 drug deductibles
- Applies only to covered medications
Copayments vs. Coinsurance
Copayments (Copays)
A fixed dollar amount you pay for services.
Coinsurance
A percentage of the cost you pay for services.
Out-of-Pocket Maximum
Your Financial Safety Net
The most you'll pay for covered medical services in a year. Once you reach this limit, your plan pays 100% of covered costs.
2025 Limits:
- In-Network: $8,850 maximum
- Combined In/Out-of-Network: $13,300 maximum
What Counts:
- Deductibles, copays, coinsurance
- Does NOT include monthly premiums
Prescription Drug Costs
Drug Coverage Phases
Initial Coverage
You pay copays or coinsurance until total drug costs reach $5,030
Coverage Gap
You pay no more than 25% for brand-name and generic drugs
Catastrophic Coverage
After $8,000 in out-of-pocket costs, you pay small copays or 5% coinsurance
Cost Comparison Tips
Compare Total Annual Costs
- Monthly premiums × 12 months
- Expected medical expenses
- Prescription drug costs
- Potential out-of-pocket maximum
Use Medicare Tools
- Medicare Plan Finder on Medicare.gov
- Plan comparison worksheets
- Drug formulary checker
- Provider directory verification
Special Cost Considerations
Extra Help (Low Income Subsidy)
If you qualify for Extra Help, you may pay $0-$4.50 for generic drugs and $0-$11.20 for brand-name drugs.
Late Enrollment Penalties
Avoid penalties by enrolling during your Initial Enrollment Period or Annual Open Enrollment.
Get Personalized Cost Analysis
Understanding Medicare costs can be complex. Our licensed agents can help you compare plans and estimate your annual healthcare expenses.