Medicare Advantage Plan Costs

Advantage Plan Premiums Fluctuate

The costs associated with a Medicare Advantage Plan will vary from plan to plan and company to company. Generally speaking, Advantage Plans premiums cost less than Original Medicare Part B premiums. Currently the Original Part B premium for 2011 is $115.40 a month. The 2011 national average bid amount for an Advantage Plan was $87.05 and it is projected to be $84.50 in 2012.

Additional Costs to Consider when Looking at Advantage Plans

However, premium costs are not the only costs associated with Original Medicare or Advantage Plans. Medicare recipients also need to factor in the costs of coinsurance, copayments and deductibles. In 2011 the deductible rate for Original Medicare Part B was $162.00. The patient in also responsible for 20% of all Medicare approved services. Mental health care is currently covered at a 55% rate. Every Medicare recipient will need to look closely at his/her personal situation in order to determine whether Original Medicare or an Advantage Plan fits his/her needs. Here are two examples to help clarify the situation:

Example 1, Mike Age 65, Diabetic. Overweight with heart problems and hearing issues.

Mike is not in great health and he has had a series of health problems throughout the last 10 years. Even though Mike needs hearing aids and a local Advantage Plan includes this coverage, his other health needs are much more serious and expensive. Mike will need a Medigap plan to meet his 20% patient obligation. Mike cannot get a Medigap Plan if he is using an Advantage Plan so signing up for Original Medicare is the best choice for Mike.

Example 2, Clara, Age 65, in good shape and not overweight.

Clara has no history of illness and she is fairly healthy. In her case, the extra expense of Original Medicare and a Medigap Policy is something she would rather not budget for. She is also able to continue with all of the same providers she was using while she was working because her old insurance company also offers Advantage Plans. For Clara, the Advantage Plan is the best solution and she gets a free gym membership to boot!

Example 3, Sam, Age 65, Overweight with no serious health issues.

Sam wears glasses and even though he is overweight he is active and has rarely been to see a doctor during the last ten years. Sam is a difficult case. Sam doesn't necessarily need a Medigap policy so Original Medicare may not be his best choice. Sam also wants the coverage for his glasses that he can get under an Advantage Plan. Sam chooses an Advantage Plan but this isn't absolutely the best choice for him. If he does have a heart attack at a later time paying his coinsurance and deductibles will be very expensive.

As the examples above illustrate choosing the right plan can be remarkably difficult because there are many factors that dictate what is the "best" plan for each person. Furthermore, it is impossible to forecast future health care needs.