Understanding Your Medicare Advantage Costs: Premiums, Deductibles and Out-of-Pocket Maxiums

Understanding Medicare Advantage Plans in 2027

Before selecting a Medicare Advantage plan, it’s crucial to comprehend the associated costs and coverage details.

What is Medicare Advantage?

Medicare Advantage plans, also known as Medicare Part C, is offered by private insurers and typically include services beyond Original Medicare (Parts A and B), such as routine dental, hearing, and vision care.

Costs Associated with Medicare Advantage

Costs can vary significantly based on the specific plan and your location. These may include:

• Premiums: Monthly payments required to maintain coverage.
• Deductibles: Amounts you pay out-of-pocket before your plan begins to pay.
• Copayments: Fixed fees for specific services, like $20 for a doctor’s visit.
• Coinsurance: A percentage of costs you pay for services, such as 20% of a $1,000 procedure.

Premiums

• Medicare Advantage Premium: The average Medicare Advantage monthly premium for 2026 held at about $14.00, though premiums vary widely by plan and state. CMS typically publishes the following year’s average premium in its landscape announcement each September — the 2027 figure isn’t out yet as of this writing.
• Medicare Part B Premium: In addition to any Medicare Advantage premiums, you must pay the standard Medicare Part B premium, which is $202.90 per month in 2026. CMS announces the following year’s Part B premium each November, so the 2027 amount isn’t confirmed yet.

Deductibles and Prescription Drug Coverage

• Medical Deductibles: Vary by plan; it’s the amount you pay before your plan covers medical expenses.
• Prescription Drug Deductibles: If your plan includes drug coverage, there may be a separate deductible. The standard 2027 Part D deductible is confirmed at $700, up from $615 in 2026.
• Out-of-Pocket Cap for Drugs: Thanks to the Inflation Reduction Act, there’s an annual cap on out-of-pocket prescription drug costs — $2,100 in 2026, rising to a confirmed $2,400 in 2027.

Copayments and Coinsurance

• Copayments: Fixed amounts for services, such as $20 for an office visit.
• Coinsurance: A percentage of the cost for services; for example, paying 20% of a $1,000 procedure.

Out-of-Pocket Maximums

• The in-network MOOP (maximum out-of-pocket) limit that CMS sets for Medicare Advantage plans (for Part A & B covered services) is $9,250 for 2026, rising to a confirmed $9,850 for 2027.
• The combined in-network and out-of-network MOOP ceiling is $13,900 for 2026, rising to a confirmed $14,800 for 2027.
• These are the maximums CMS allows — most plans set their actual limits lower. KFF found the average in-network MOOP across plans was closer to $5,421, and the average combined MOOP closer to $9,825, for 2026.

Costs that typically count toward your out-of-pocket maximum include:

• Deductibles
• Copayments
• Coinsurance

Costs that usually do not count toward your out-of-pocket maximum:

• Premiums
• Prescription drug costs
• Services not covered by Medicare

Changes and Enrollment Trends

• Plan Changes: Medicare Advantage plans can change annually, including costs and provider networks. It’s essential to review your plan each year during the open enrollment period (October 15 – December 7).
• Enrollment Trends: CMS projected that about 48% of all Medicare beneficiaries would be enrolled in Medicare Advantage in 2026. Using a narrower measure — beneficiaries who have both Part A and Part B and are actually eligible to choose Medicare Advantage — KFF put enrollment at around 55% as of March 2026. CMS’s 2027 enrollment projection isn’t out yet; it typically arrives with the September landscape announcement.