How to reduce your Medicare Advantage monthly premium

Medicare Benefits

Sep 7, 2021

Depending on your income and the Medicare Advantage (MA) plan you have, you could be paying hundreds, if not thousands, of dollars in monthly premiums each year.

If you’re paying a Part B premium and an additional premium for your Medicare Advantage plan, you may be able to lower your monthly costs by switching to a different MA plan.

In many areas, you may be able to find an MA plan with a $0 premium. You may even qualify for an MA plan that helps pay all or part of your Part B premium. It doesn’t take much time to compare your current coverage to other plans available in your area. You may find a Medicare Advantage plan with a lower monthly premium that saves you money overall – and still provides you with the benefits you need. If you find a plan that’s right for you, you can enroll during an enrollment period.

Comparing premium costs

Most Medicare recipients are responsible for paying a monthly Part B premium. The standard amount for the Part B premium in 2022 is $170.10, but you could be paying more based on the income you filed on your IRS tax return. If you qualify, you may be able to enroll in a Medicare Advantage plan that helps pay some or all of your Part B premium.

The Centers for Medicare & Medicaid Services reported the average Medicare Advantage premium in 2022 is $19 per month. The average goes up for MA plans that include additional benefits, including Part D prescription drug coverage. The benefits you need and the type of plan you choose may affect the plan’s premium.

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The type of MA plan you choose can affect your premium costs

There are different types of MA plans to choose from, such as HMOs, PPOs, and Special Needs Plans. They vary in costs, benefits, and flexibility and monthly plan premiums may depend on what benefits and other costs are covered.

Generally, Medicare Advantage Health Maintenance Organizations (HMOs) will offer lower monthly premiums than Preferred Provider Organizations (PPOs). HMOs may have lower monthly premiums, but you may be required to visit doctors within the plan’s network of providers. You may also need to get a referral from your primary care doctor before seeing a specialist. You may also have a higher annual deductible in an HMO.

On the other hand, a PPO may have a higher monthly premium but will allow you more flexibility. In a PPO, you may be able to visit specialists without a referral and see providers outside the network for a higher copay. You may also have a lower annual deductible.

If you qualify for a Medicare Advantage Special Needs Plan because of a specific circumstance, you may have a monthly premium in addition to your Part B premium, unless you qualify for Medicare and Medicaid. If you’re enrolled in a Dual-eligible Special Needs Plan (D-SNP), you may get help paying for some or all of your monthly Medicare premiums. Your costs may depend on whether you qualify for full or partial Medicaid benefits, what state you live in, and which plan you have.

Understanding how monthly premiums may affect your overall out-of-pocket costs

Premiums are part of your Medicare out-of-pocket costs, along with annual deductibles, doctor visit copays, and prescription drug copays. After comparing other plan premiums to your current coverage, you may find MA plans with lower monthly premiums than you pay now, but consider the overall picture before enrolling.

For instance, if you are relatively healthy and do not need to visit the doctor often or take prescription medications, the most prominent part of your Medicare costs may be your premiums. If you find a plan that offers a $0 monthly premium instead of the $25 premium you pay now, you may be tempted to switch. Consider the other out-of-pocket costs and benefits before enrolling. The plan with the $0 premium may have a higher annual deductible and/or may charge more in doctor visit copays or prescription copays than your current plan. If you face an illness or injury that requires more care than you currently require, your new plan might actually end up costing you more in the long run.

When can you switch to a plan with lower monthly premiums?

If you find a different Medicare Advantage plan with a lower monthly premium that you’d like to switch to, you may be able to change your coverage during one of the following enrollment periods:

  • Annual Election Period (AEP): AEP starts on October 15 and ends December 7. During this period, you can switch from one MA plan (with or without prescription drug coverage) to another (with or without prescription drug coverage) to lower your monthly premiums. (If you have Original Medicare currently, you could enroll in an MA plan during AEP. Or, you can drop your MA plan and revert to Original Medicare.)
  • Medicare Advantage Open Enrollment Period (MA-OEP): From January 1 through March 31, you can make one change if you’re already enrolled in a Medicare Advantage plan.
  • Special Enrollment Period (SEP): If you experience certain events in your life, you may qualify for a Special Enrollment Period. For example, if you move out of your current plan’s service area, move into a long-term care facility, or become eligible for Medicaid, you may be able to switch Medicare plans.

Ready to potentially lower your monthly Medicare premiums?

Take the time to explore your options and compare plans. You may find plans with lower monthly premiums and the benefits you need. A knowledgeable, licensed sales agent may be able to answer questions, address your concerns, help you find a plan that’s right for you – and help you enroll when you’re ready.

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