How Much Does Medicare Part C (Medicare Advantage) Cost Per Month?
- Find out the average Medicare Part C cost per month in 2021 and compare the average premium for Medicare Advantage plans in each state in our review of Part C plan costs.
One of the first questions people often have concerning Medicare Part C plans is the cost. And most people are quite surprised at the answer.
The cost of a Medicare Part C (also commonly called “Medicare Advantage”) plan can be quite low relative to the cost of other types of health insurance. The Centers for Medicare and Medicaid Services (CMS) estimates that the average premium for a Medicare Part C plan in 2021 is just $21 per month.
What’s even more surprising is that unlike many other types of insurance, the cost of Medicare Advantage plans is actually decreasing over time. The $21 average premium in 2021 represents a 34% drop since 2017 and is the lowest average premium since 2007. The cost of a Medicare Part C plan has been cut roughly in half over the last decade.
A big reason for the low monthly premiums is that many beneficiaries are enrolled in $0 premium Medicare Advantage plans. In fact, 60% of beneficiaries enrolled in Medicare Advantage plans with prescription drug coverage (known as MA-PD plans) pay no monthly premium for their plan. And 96% of all beneficiaries have access to at least one $0 plan.
You can explore the average monthly premium for Medicare plans in every state in 2021.
Additional Medicare Costs
As with most any type of health insurance, the monthly premium isn’t the only cost to beneficiaries. Below is a look at the other cost requirements for Medicare Part C plan members.
Medicare Part B Premium
One of the eligibility requirements for belonging to a Medicare Part C plan is maintaining enrollment in Original Medicare (Medicare Part A and Part B). Most people do not pay a premium for Medicare Part A. However, Medicare Part B requires a standard monthly premium of $148.50 in 2021, and higher income earners may have to pay an additional surcharge.
Even though you will be getting your Part B coverage through your Medicare Advantage plan, you must still pay the Part B premium in order to maintain your enrollment. Some Medicare Advantage plans (often called “give back” plans) actually add back your Medicare Part B monthly premium, either as a statement credit on your plan or through your monthly Social Security benefits check.
A deductible is the amount you must pay out of your own pocket for covered care before the plan’s coverage kicks in. Some Part C plans have a separate deductible for medical care and drug coverage. The average drug deductible for MA-PD plans is $167.31 per year in 2021.
Some Medicare plans may feature $0 deductibles.
After meeting your deductible, you will likely be responsible for a coinsurance payment when receiving care. Coinsurance is your share of the bill split between yourself and your insurance carrier and is typically measured in terms of a percentage. For example, a 20% coinsurance means you would pay for 20% of your medical bill and your Part C plan would pick up the remaining 80%.
Most Medicare Part C plans have coinsurance requirements that range between 10% and 50%. depending on the plan level and type of care.
A copayment is similar to coinsurance but comes in the form of a flat fee instead of a percentage. When you visit a doctor using your Part C plan, you might be responsible for a $20 copayment for the visit and your plan will cover the rest of the cost.
Copayments required by Medicare Part C plans commonly fall in the range of $20 to $50.
One of the advantages of a Medicare Part C plan is that they are required by law to include an annual out-of-pocket limit. An out-of-pocket limit (or out-of-pocket maximum) is the highest amount that you will be required to pay for covered care out of your own pocket over the course of the year. Once that limit is reached, the plan then pays for 100% of covered care for the remainder of the year.
For 2021, the highest out-of-pocket limit allowed by law is $7,550, and most plans feature limits lower than that.
Original Medicare does not have an out-of-pocket limit.
Factors That Affect Cost
There are a few different factors that can affect the cost of a Medicare Part C plan.
Medicare Part C is sold by private insurance companies who are free to set their own prices according to market competition.
It’s not uncommon for a Medicare Part C plan to cost more in a big city than in a rural area, just as the overall cost of living will often be different between the two locations.
- Coverage level
Plans that include stronger coverage and more benefits will typically come at a higher price than more basic plans.
Plans with higher deductibles and coinsurance or copayments may have a lower monthly premium as a tradeoff while plans with higher monthly premiums may come with lower deductibles and cost-sharing requirements.
- Plan type
Medicare Part C plans come in several different forms such as HMO or PPO. HMO plans generally have lower premiums due to having more restrictions about where the plan can be used.
Compare Medicare Part C Plan Costs in Your Area
Plan pricing is not always made readily available on an insurance company’s website. But a licensed insurance agent can help you gather up the costs for the various Medicare Part C plans available in your area and help you better understand the terms and conditions of each. You can also compare plan costs online from multiple different insurance companies.