Understanding Medicare Advantage Plans: Premiums, Copays, and Coinsurance

Ikey Fowler

A Medicare Advantage Plan, or MA plan, is a private health plan that works with Medicare to deliver all of your Part A and Part B benefits. When you enroll in one of these plans, most Medicare-covered services are handled through the plan rather than Original Medicare. Many Medicare Advantage Plans also include prescription drug coverage. If you are comparing plans, there are six main factors to review: premiums, copays, coinsurance, deductibles, the doctors and facilities that accept the plan, and the plan’s drug formulary. This installment focuses on premiums, copays, and coinsurance.

Premiums for MA plans can differ based on the plan type and the insurance company offering it. While the premium should factor into your choice, it should not be the only thing you consider. In some cases, the plan with the lowest premium may be the best fit for your needs, but in others it may end up costing more overall if the rest of the coverage does not align with your situation. If you already have an MA plan that is meeting your needs, changing plans just because another one has a lower premium may not be the best move.

Copays and coinsurance are also important when comparing MA plans. A copay is a fixed amount you pay for a covered service, such as the amount charged when visiting a primary care doctor. Coinsurance is a percentage of the cost you pay for certain services, such as durable medical equipment.

If you have questions about Medicare or Medicare health plans, contact Alabama Health Guidance at 256-648-5710, visit the office at 885 Florence Blvd. in the Four Lane Shopping Center, or email [email protected]. Alabama Health Guidance is an independent insurance agency and is not affiliated with Medicare or any other government agency.