How to reduce your Medicare out-of-pocket costs

Medicare Benefits

Sep 8, 2021

If you’re enrolled in a Medicare Advantage (MA) plan, you might be paying quite a bit in annual deductibles, monthly premiums, coinsurance, and copays. If your out-of-pocket costs last year were too high, you may want to explore your options. You may be able to lower your out-of-pocket costs by switching to another MA plan.

Other plans available in your area may offer lower Medicare Advantage plan premiums, copays for doctor visits or prescription drugs, and/or a lower maximum out-of-pocket limit. If you compare your current coverage with other plans, and decide to switch, you may be able to change your coverage during an enrollment period.

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Comparing out-of-pocket costs

If you feel like you paid too much out-of-pocket last year, take some time to review your current coverage. What was the total amount you spent for Medicare-covered services in premiums, copays, and coinsurance? Did you reach your maximum out-of-pocket limit? If you’ve been spending more than you’re comfortable with, check out other MA plans. You may find one that lowers your out-of-pocket costs and still provides you with the benefits you need.

Comparing plans is the first step toward reducing your out-of-pocket costs. The amount you spend each year may depend on the plan premium, doctor and prescription copays, how often you need to use your benefits, and the plan’s annual maximum out-of-pocket (MOOP) limit.

Let’s consider how you can lower these costs – and what factors you may want to consider before switching plans.

Plan premiums

If you’ve been relatively healthy, rarely visit a doctor, and don’t take prescription medications regularly, your monthly premiums may account for the bulk of your Medicare out-of-pocket costs. If that’s the case – and your needs don’t change – enrolling in an MA plan with lower plan premiums may save you money overall. MA plan monthly premiums can vary, but in many areas, you may even be able to find a plan with a $0 plan premium. You’ll still be responsible for your Part B premium, unless you qualify for a Medicare Advantage plan that helps pay all or part of it.


Medicare Advantage plans may have different annual deductibles. Plans with higher deductibles may have lower monthly premiums. A plan with a lower deductible may be more cost effective for you if you use your benefits frequently.

Doctor copays

If you visit a doctor frequently, your copays can add up quickly. In this case, you may find that an MA plan with lower copays may help save you money. How often you require care can affect your annual out-of-pocket costs. Many Medicare Advantage plans have a fixed doctor copay, while some will have higher copays when you see a specialist or visit an out of network provider.

Annual maximum out-of-pocket limits

If you require frequent Medicare-covered services, your plan’s annual maximum out-of-pocket limit can make a difference in your overall costs. Medicare Advantage plans are required by the Centers of Medicare & Medicaid Services (CMS) to provide a fixed maximum amount that you’ll have to pay out-of-pocket each year. Once you’ve spent that amount, your plan will pay 100% of your covered benefits for the remainder of the year.

In 2022, the MOOP can’t exceed $7550, but many plans set lower limits. If you use your benefits often, a plan with a lower MOOP may save you money. It’s important to consider other factors before switching plans, though. While Medicare-covered services count toward your plan’s maximum out-of-pocket limit, monthly premiums and prescription drug costs do not.

If you need some assistance as you compare plans and or have questions along the way, a knowledgeable licensed sales agent may be able to help you find a plan that’s right for you.

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