What's the Cost of a Medicare Advantage Plan?
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A Medicare Advantage plan with prescription drug coverage costs $28 per month, on average.
A wide variety of options are available, with rates ranging from $0 to $266 per month. HMO Medicare Advantage plans are usually the cheapest, averaging $20 per month.
The average Medicare Advantage cost is on top of the $164.90 per month that you pay for Medicare Part B, which is typically deducted from Social Security payments. Medicare Advantage enrollees also pay for a portion of their medical care. The plan's deductible, copays and out-of-pocket maximum will affect how much you spend on health care.
Medicare Advantage cost
Medicare Advantage plans, also called Medicare Part C plans, with prescription drug coverage cost an average of $28 per month in 2023, down from $33 in 2022.
Cheaper options are available, and most people have access to Medicare Advantage plans that cost $0 per month. With these plans, you wouldn't pay anything on top of what you pay for Medicare Part B. In fact, more than half of all plans have no monthly cost.
In addition to the free Medicare Advantage plans, there are also a large number of moderately priced plans that offer a higher level of coverage. These plans could have lower deductibles and lower fees for appointments or procedures. They may also offer more add-on benefits such as dental or vision care, as compared to $0 plans.
There are also more expensive Medicare Advantage plans available. Generally, plans with more expensive monthly rates will offer the lowest deductibles, copays and out-of-pocket maximums.
Depending on your health care needs, a Medicare Part C plan with higher monthly costs may be a good value if your health care tends to be expensive. For example, spending $25 per month ($300 per year) on a Medicare Advantage plan would be worth it if the better benefits can save you more than $300 in medical costs, as compared to a $0 Medicare Advantage plan.
Comparing Medicare Part C costs by insurance company
Cigna is the cheapest Medicare Advantage provider with an average cost of $7 per month, when compared to the other largest companies.
Both Cigna and Aetna stand out for having a large number of cheap plans, and many of their plans cost $0 per month. A plan from UnitedHealthcare, the largest Medicare Part C company in the country, costs an average of $18 per month, although no-cost plans are available.
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Blue Cross Blue Shield has high monthly rates but also offers the biggest provider network in the country. If you like to have a large number of doctors and hospitals to choose from, Blue Cross Blue Shield might be worth the higher monthly rate.
Monthly Medicare Advantage cost by company
Company | Average monthly cost | |
|---|---|---|
| Cigna HealthSpring | $7 |
| Wellcare | $11 |
| AARP/UnitedHealthcare | $18 |
| Aetna/CVS | $19 |
| Humana | $32 |
| Blue Cross Blue Shield | $42 |
| Kaiser Permanente | $48 |
Medicare Advantage rates by plan type
A Medicare Advantage HMO plan costs an average of $20 per month and is the cheapest plan type available.
The type of Medicare Advantage plan you have influences how much the plan costs and its benefits. An HMO plan is generally cheaper because it restricts your coverage to the doctors and medical providers that are a part of the plan's network.
You'll typically pay more for a Medicare Advantage PPO plan, with average costs ranging from $28 to $64 per month. PPO plans are more expensive but give you greater flexibility in getting covered medical care. Enrollees have coverage for both in-network and out-of-network health services, which is valuable if you want to see different medical specialists and have better coverage when traveling. The trade-off between an HMO and a PPO plan is the cost. PPO plans are generally more expensive because they're less restrictive.
Monthly Medicare Advantage rate by plan type
Plan type | Average cost |
|---|---|
| HMO | $20 |
| Local PPO | $28 |
| Regional PPO | $64 |
| PFFS | $79 |
| Cost plan | $148 |
Other types of plans are not as popular or as widely available as HMOs and PPOs. HMO-POS plans are a mix between HMOs and PPOs. They are usually more expensive than a traditional HMO but offer more provider flexibility.
The two other plan types are private fee-for-service (PFFS) plans and Medicare Cost plans, both of which are not commonly offered and tend to be more expensive.
Total monthly Medicare Advantage costs
Even when you sign up for Medicare Advantage, you'll still have to pay for Original Medicare (Parts A and B).
A Medicare Advantage plan is sold by a private insurance company, but it’s part of the government’s Medicare program. So while the cost of Medicare Advantage is determined by the plan you choose, the costs for Medicare Parts A and B are set by the government.
Typical monthly costs:
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Medicare Part A (hospitalization): $0
About 99% of Medicare enrollees don't pay anything for Medicare Part A. That's because this program is largely funded by payroll deductions. While you (or your spouse) were working, you paid a Medicare tax on your income, and as a result, you won't pay for Medicare Part A when you're receiving benefits.
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Medicare Part B (medical care): $164.90 per month
The cost of Medicare Part B is set by the government each year, and most people pay this fee as a deduction from Social Security benefits. People who have incomes higher than $97,000 will pay more for Medicare Part B.
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Medicare Advantage (bundled coverage): $28 per month, on average
What you pay for a Medicare Advantage plan covers the plan's perks when compared to Original Medicare, such as vision and dental coverage, an out-of-pocket maximum and prescription benefits. A $0 Medicare Advantage plan means you don’t pay anything on top of Medicare Part B. There are also some plans that have a "giveback" program. The plans cost $0 per month and reduce your monthly cost for Medicare Part B.
How much does the government pay for Medicare Advantage plans?
What you pay for a Medicare Advantage plan only represents a portion of the plan's cost. The federal Medicare program also pays the insurance company a flat rate for each Medicare enrollee, typically more than $1,000 per month. The actual payment amount varies based on adjustments for location, plan benefits and overall community health.
Medicare Advantage benefits: What you pay for health care
On top of what you pay for your Medicare plan, you'll also pay for a portion of your health care costs.
Your health care spending, also called cost sharing, is broken into three categories.
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Deductible
The deductible is the amount you pay toward your health care costs before your plan's benefits kick in. When you're enrolled in a Medicare Advantage plan, the Medicare Part B deductible does not apply. Instead, each plan sets its own deductible for medical care and a separate deductible for prescription drug benefits.
The average Medicare Advantage deductible varies by location. Some parts of the country have a wide variety options, and there could be multiple plans available with a $0 deductible. With these plans, the medical benefits begin right away without requiring any upfront spending.
When choosing a Medicare Advantage plan, you should think about how much you are comfortable paying for your health care. A deductible that's less than $1,000 can help you limit your medical costs, which can be an important feature for seniors and Medicare enrollees who could have increasing health care needs or a fixed income. But plans with low deductibles usually cost more, so you'll need to consider your monthly budget.
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Copayments and coinsurance
Copays and coinsurance make up your portion of health care costs when the bill is split between you and your insurance company. With a copay, you might only have to pay $20 for a visit to your primary care doctor, and your insurance company will pay the rest. With coinsurance, you pay a percentage of your medical costs for a given visit or service. For example, a $1,000 procedure could be split with the insurer paying 80% and you paying 20%. Coinsurance only kicks in after you've met your plan's deductible.
Medicare Advantage plans do not have standardized copays or coinsurance. Instead, each plan sets its own amounts. When considering copays, we recommend that you compare Medicare Advantage plans based on the types of medical treatments you expect to need, such as chiropractic care, joint replacement surgery or diabetes care.
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Out-of-pocket maximum
The out-of-pocket max is a cap on how much of your medical costs you'll pay each year. Original Medicare (Parts A and B) does not have an out-of-pocket maximum. Medicare Advantage plans add this feature to Parts A and B. This means that Medicare Advantage plans give you protection from very high medical bills, an especially important benefit for those with chronic medical conditions or who expect to need expensive health services.
The average out-of-pocket maximum for a Medicare Advantage plan is $5,404. The amount varies between plans, with each plan providing its own limit on how much an enrollee could spend on covered medical services. That includes your spending toward the deductible, copayments and coinsurance.
If you expect to need surgery or other expensive medical treatments, choose a plan with a low out-of-pocket max. The plan will generally be more expensive, but it could save you thousands of dollars in medical expenses.
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Remember that there’s frequently a trade-off between the cost of a plan and its medical benefits.
With a Medicare Advantage plan that has better benefits, you’ll pay more each month, but you’ll typically pay less when you need medical care. With a $0 Medicare Advantage plan, your monthly costs will be low, but you could have higher expenses when you need medical care.
How to get the best deal with a Medicare Advantage plan
How you can save
What to avoid if you want to save money
Frequently asked questions
How much do Medicare Advantage plans cost?
The average cost of a Medicare Advantage plan is $28 per month, but $0 plans are available in many locations. The cost for Medicare Advantage is on top of the $164.90 per month that you pay for Medicare Part B.
How can Medicare Advantage plans cost nothing?
When a Medicare Advantage plan costs $0, that means the amount that the federal Medicare program pays to the insurance company is enough to cover the plan's benefits. With these free Medicare Advantage plans, you don't have any extra costs other than the typical payment for Medicare Part B, which is usually deducted from your Social Security payment.
Are Medicare Advantage plans really free?
Many Medicare Advantage plans cost $0 per month, but enrollees still need to pay for Medicare Part B, which costs $164.90 per month.
Is Medicare Advantage more expensive than Medicare?
A Medicare Advantage plan is usually the cheaper overall option for those with low or moderate medical needs, after considering the cost of the plan and expenses for medical care. Medicare Advantage enrollees typically pay very little each month but will pay a larger portion of medical costs. However, choosing a combination of Medicare, Medicare Supplement and a Medicare Part D plan is usually cheaper for those with chronic health problems or ongoing medical needs. This option has higher monthly costs, but enrollees pay less overall in total medical expenses.
Do Medicare Advantage plans pay 100%?
No, if you have a Medicare Advantage plan, you'll still pay for a portion of your medical costs. This includes out-of-pocket spending toward the plan's deductible, as well as copays for medical services.
Methodology and sources
Medicare Advantage costs are based on 2023 public use files sourced from the Centers for Medicare & Medicaid Services (CMS). Average costs are based on plans that include prescription drug coverage. Our analysis excludes employer-sponsored plans, Special Needs Plans, Medicare-Medicaid Plans (MMPs), PACE plans, sanctioned plans and health care prepayment plans (HCPPs).
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Deductibles, copays, coinsurance, limitations, and exclusions may apply.
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