» Medicare Advantage vs. Medicare Supplement: Which is best?

No matter which type of Medicare plan you choose, you must continue to pay your Part B premium. If you’re one of the few people who pay for Part A, you’ll have to continue paying that premium as well.

Premiums

You pay a separate monthly premium for Medicare Supplement plans. The cost of your premium depends on the plan you choose, your age, location, sex, and other factors. Premiums typically range between $50 and $250 a month and often increase in price as you get older.

Some Medicare Advantage plans have a monthly premium, but most people choose a $0 premium plan. Among those who do pay a premium, the average cost is $25 a month, which usually includes Part D coverage.

Deductibles

You don’t have an annual deductible with Medicare Supplement plans unless you choose a high-deductible plan. Most Medicare Supplement plans pay your Part A deductible and coinsurance and 100% of your Part B costs after you meet the Part B deductible.

If you choose a high-deductible plan, your plan pays 100% of your costs after you pay $2,340 out-of-pocket.

Medicare Advantage plans may or may not have an annual deductible, but most people have access to a $0 deductible plan. Some plans have a separate deductible for Part D.

Cost sharing

There is no cost sharing with most Medicare Supplement plans. This means the plans pay 100% of your Part A inpatient and Part B coinsurance. If you choose Plan N, you pay a small copayment at the time of service. The copay is usually $20 or less for doctor visits and $50 or less for emergency room care.

You usually pay a flat copayment for health care with Medicare Advantage plans. A typical HMO plan might charge $5 for primary care visits, $25 for specialist care, and $50 for urgent care and emergency room visits.

Out-of-pocket maximum

Out-of-pocket limits only apply to two Medicare Supplement plans: Plan K and Plan L. These two plans pay between 50% and 75% of your Part A and Part B coinsurance until you reach the out-of-pocket maximum. After that, they cover 100% of your costs. In 2021, the out-of-pocket maximums for Plan K and Plan L are $6,220 and $3,110, respectively.

All Medicare Advantage plans have an out-of-pocket limit. Once you reach it, your plan pays 100% of covered costs. Medicare sets the maximum limit each year, but most plans set their maximum below Medicare’s limit. In 2021, the average Medicare Advantage out-of-pocket maximum is about $5,091.

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