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

Understanding Medicare Advantage Plans in 2025

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 in 2026 (Projected)

• Medicare Advantage Premium: The average monthly Medicare Advantage premium is projected to remain stable at $14.00 in 2026, though premiums can vary widely by state.
• Medicare Part B Premium: In addition to any Medicare Advantage premiums, you must pay the standard Medicare Part B premium, which is $206.50 per month in 2026.

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.
• Out-of-Pocket Cap for Drugs: Thanks to the Inflation Reduction Act, there’s a $2,100 annual cap on out-of-pocket prescription drug costs in 2026.

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 for Medicare Advantage plans (for Part A & B covered services) will drop slightly to $9,250 in 2026.

• Information on the combined in- and out-of-network MOOP estimates that the combined cap will go up to $14,750 in 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: As of September 2025, 48% of Medicare beneficiaries are enrolled in Medicare Advantage plans.