What Will It Really Cost?

Why the premium is only the beginning

When people compare Medicare Advantage plans, they tend to look first at the monthly premium, since it's the most visible number. Premiums range widely from one plan to the next. But the premium is just one of several costs that make up a plan, so it helps to understand them all together.

Think of a Medicare Advantage plan's cost in four parts:

1. Premiums — what you pay monthly to have the plan
2. Deductibles — what you pay before the plan starts covering certain services
3. Copays and coinsurance — what you pay each time you use care
4. The out-of-pocket maximum — the ceiling on what you'll pay in a bad year

A plan can be cheap in one area and expensive in another. The goal is to look at all four together.

Premiums: what to know

There are two things worth understanding about how premiums work:

The plan premium and the Part B premium are separate. Whether or not a plan charges its own monthly premium, you continue to pay your standard Medicare Part B premium. The federal government sets this, adjusts it each year, and sets it higher for people with higher incomes. In recent years, it has been roughly $185 per month for most people — always confirm the current year's figure. Some plans charge an additional premium on top of Part B, and some don't, but the Part B premium still applies.

The premium is one piece of the overall cost. Plans balance their premiums, deductibles, copays, and out-of-pocket maximums in different combinations. Because of that, it helps to look at the full picture rather than any single number, so you have a clear idea of what to expect based on the level of care you use.

Deductibles: what you pay before Coverage kicks in

A deductible is the amount you pay out of pocket before the plan begins paying its share. Medicare Advantage plans can have deductibles for medical services, for prescription drugs, or both — and some have no deductible at all.

• Some plans have no medical deductible but tend to charge higher premiums or copays to offset it.
• If the plan includes drug Coverage, it may have a separate prescription drug deductible (this maximum is set annually, and many plans set theirs lower or waive it).

When comparing plans, check whether each deductible applies, how much it is, and which services it covers.

Copays and coinsurance: what you pay as you go

These are the costs you pay each time you receive care:

• Copay — a fixed dollar amount, like $20 for a primary care visit or $45 for a specialist.
• Coinsurance — a percentage of the cost, like 20% of a procedure.

This is where the real difference between plans often lies. Two plans with identical premiums can charge very different amounts for the things you actually use — specialist visits, hospital stays, imaging, physical therapy, or ambulance rides. If you know you see certain providers often or have a procedure coming up, compare the copays for those specific services, not just the general ones.

The Maximum Out-Of-Pocket: your financial safety net

This is one of the most important — and most overlooked — numbers in the entire plan, so it's worth understanding well.

The maximum out-of-pocket limit (MOOP) is the most you'll have to pay in a year for covered in-network medical services. Once your spending on deductibles, copays, and coinsurance reaches that limit, your plan pays 100% of covered Part A and Part B services for the rest of the calendar year. It then resets every January 1.

A few key points:

• Original Medicare has no such limit — this cap is a genuine advantage of Medicare Advantage plans and Medigap. With Original Medicare alone, your 20% share of costs could continue with no ceiling.
• The federal cap is high, but plans can set theirs lower. The government sets a maximum each year (it was $9,250 for in-network care in 2026), and many plans choose lower limits to attract members. A lower MOOP means better protection in a bad health year.
• PPO plans may have two limits — one for in-network care and a higher one that combines in- and out-of-network care. If you'll use out-of-network providers, look at both.

Because it's the number that protects you when things go wrong, the MOOP deserves as much attention as the premium — arguably more, if you have ongoing or unpredictable health needs.

Two costs that don't count toward the MOOP

This trips people up, so it's worth stating plainly:

• Prescription drugs are tracked separately. Your Part D drug spending does not count toward your medical out-of-pocket maximum. Drugs have their own annual out-of-pocket cap — $2,400 in 2027 — after which the plan covers 100% of covered drugs for the rest of the year. So in a high-cost year, you're protected on two separate tracks: one for medical care, one for prescriptions.
• Premiums and extra benefits don't count either. Your monthly premiums and out-of-pocket costs for extras like dental, vision, or hearing generally don't count toward the MOOP.

What to check before you enroll

A practical checklist for comparing the true cost of any plan:

1. Confirm the monthly premium — and remember Part B. Factor in the plan premium plus your ongoing Part B premium.
2. Check every deductible—medical, drug, or both — and what each covers.
3. Look up copays for the care you actually use. Primary care, specialists, hospital stays, imaging, therapy, and anything you know is coming.
4. Compare the out-of-pocket maximum. A lower MOOP means stronger protection in a bad year.
5. Estimate your cost in a high-use year, not just a healthy one. Add up premiums plus what you'd pay if you had a hospital stay or a serious diagnosis. The "worst case" comparison often reveals which plan is genuinely safer for you.
6. Match the plan to how much care you expect to use. The right plan depends on your health needs. If you rarely need care, one set of trade-offs may suit you; if you have ongoing conditions or expect significant care, a different balance of premium, copays, and out-of-pocket maximum may fit better.

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This article is for general educational purposes and is not a substitute for personalized advice. Premiums, deductibles, copays, and out-of-pocket limits vary by plan and location and change each year. Always confirm the current year's figures and the specific costs of any plan directly with the plan or a licensed advisor before enrolling.