Average Medicare Advantage Premiums May Drop — But Lower Costs Aren’t Guaranteed

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There may be some welcome news for millions of Medicare beneficiaries: average Medicare Advantage premiums are expected to decline. The projected drop is about 16.5%, which could give retirees more room in their healthcare budgets. Still, the headline savings may not translate into lower overall spending for everyone.

Medicare Advantage costs involve more than the monthly premium. Changes to deductibles, copayments, provider networks, and prescription coverage can offset any savings, which is why reviewing your plan before Open Enrollment ends is so important.

If you are unsure whether your current Medicare plan still fits your needs, Chapter offers free Medicare plan reviews to help you compare options without pressure to enroll. You can call (864) 668-3280 or visit askchapter.org for personalized help.

Here is what to look at during Medicare Open Enrollment.

Average Premiums Are Falling, but Plans Can Still Vary

CMS projects that the average Medicare Advantage premium will decline from about $14.37 to $12, a drop of roughly 16.5%. The agency’s announcement makes clear that these are enrollment-weighted national averages, not guaranteed savings for every beneficiary.

Your own plan could keep the same premium, raise it, or change other features that affect your total healthcare costs. Someone enrolled in a $0-premium Medicare Advantage plan would not see a reduction in that particular expense, even if the national average falls. When evaluating Medicare Advantage costs, the details of your plan matter more than the national figure.

A Lower Premium Can Mask Higher Copayments

One common mistake is focusing only on the monthly premium while ignoring what care actually costs. Medicare Advantage plans often charge copayments or coinsurance for specialist visits, diagnostic tests, outpatient procedures, and hospital stays.

Medicare.gov notes that costs and coverage rules can differ from one plan to another. For example, saving $5 a month on premiums could still leave you paying more each year if specialist visits rise from $30 to $50 and you need frequent appointments. Check your Evidence of Coverage and Annual Notice of Change for increases that could cancel out the apparent savings.

Pay Close Attention to the Out-of-Pocket Maximum

Every Medicare Advantage plan must set an annual limit on covered Part A and Part B out-of-pocket costs, but those limits are not the same across plans. Once you reach that limit, the plan generally pays the covered Medicare Part A and Part B costs for the rest of the year, subject to plan rules. The Medicare Rights Center offers educational resources on cost-sharing and annual out-of-pocket limits.

A plan with a lower premium but a higher maximum could expose you to much larger expenses in a year that includes surgery, hospitalization, or ongoing specialist care. Since costs can shift based on your healthcare needs, compare both routine copayments and the most you could owe.

Prescription Changes Can Eliminate Savings

Many Medicare Advantage plans include prescription drug coverage, but the drugs covered and the amount you pay can change from year to year. A medication that was affordable in one year could move to a different formulary tier, face new restrictions, or cost more at your preferred pharmacy the next year.

The Medicare Plan Compare tool lets beneficiaries review plans using their medications and preferred pharmacies to estimate costs. Even with Medicare Part D’s $2,400 annual out-of-pocket threshold for covered medications, premiums and certain noncovered drug expenses can still create financial strain. Before renewing, compare each prescription on your medication list rather than assuming your current coverage will stay the same.

Your Doctors and Hospitals May Not Stay In-Network

A lower premium means little if your preferred cardiologist, primary care doctor, or local hospital is no longer in the plan’s network. Medicare Advantage insurers can change contracted providers, so a doctor who accepted your coverage in one year may not participate in the next. Depending on the plan, nonemergency care outside the network can lead to higher costs or limited coverage.

Chapter can help compare Medicare plans based on your preferred doctors, prescriptions, and healthcare needs so you can identify options worth considering before enrolling.

For a free, no-pressure Medicare review, call (864) 668-3280 or visit askchapter.org, and verify provider participation directly with the plan and the doctor’s office before making a final choice.

Some Beneficiaries May Need a Different Plan Altogether

Although average premiums are projected to decline, some Medicare Advantage insurers are reducing their participation in certain markets or dropping individual plans. That means some beneficiaries may not be able to renew their existing coverage, even if they were satisfied with the cost and benefits. Medicare advises beneficiaries to review their Annual Notice of Change and plan communications to see whether their coverage will continue and what alternatives may be available. If your plan ends, you may qualify for a special enrollment opportunity, but deadlines and options depend on the situation.

If you have received notice that your plan is being discontinued, Chapter offers free help comparing replacement Medicare coverage so you can review available options instead of rushing into a new plan without understanding the costs and benefits.

Your Total Annual Budget Is the Real Measure

The best way to assess Medicare Advantage costs is to estimate your spending over a full year instead of looking only at one monthly premium. Add expected premiums, routine medical copayments, prescription costs, and likely specialist expenses, while also considering the annual out-of-pocket maximum. Remember that most Medicare Advantage enrollees must still pay their Medicare Part B premium, even when their Advantage plan advertises no additional premium.

You can compare plans using Medicare.gov or get free, unbiased help through your local State Health Insurance Assistance Program. Looking at all of these costs together gives a clearer picture of whether a plan will really save money or simply move expenses elsewhere in your healthcare budget.

Do Not Let a Lower Premium Hide the Bigger Picture

Falling average Medicare Advantage premiums may sound like good news, but they do not guarantee that every retiree will spend less on healthcare. Changes in prescription coverage, provider networks, deductibles, and copayments can easily outweigh a small monthly premium reduction. With Medicare Open Enrollment approaching its deadline, this is the time to review your coverage rather than automatically renewing a plan that may no longer meet your needs.

Chapter offers free Medicare plan comparisons with no pressure to switch, and if your current plan still works for you, you can keep it. To review your options before the deadline, call Chapter at (864) 668-3280 or visit askchapter.org and see whether another plan could offer better value for your healthcare needs.