Understanding Medicare can be tough, especially when it comes to its costs. We have created a simplified look at the expenses for Original Medicare, Medicare Supplement (Medigap) Plans, and Medicare Advantage Plans for 2024 to make things easier for you.
Medicare Plan Types
There are two main types of plans to choose from: Medicare Supplement (also known as Medigap) and Medicare Advantage (Part C).
Medicare Supplement Plans (Medigap)
Medicare Supplement plans pay secondary to Original Medicare, allowing you to visit any doctor nationwide who accepts Original Medicare. Any charge approved by Medicare is automatically approved by the supplement carrier and paid directly to the provider. However, these plans do not cover dental, vision, or prescription drugs. Prescription coverage is provided separately through Part D plans.
Medicare Advantage Plans (Part C)
Medicare Advantage plans take over Medicare and become your primary insurance. They generally come in the form of PPO or HMO plans, combining Medicare Parts A and B, and often include drug coverage. Additionally, most plans offer some dental, vision, and other “extra” benefits.
Parts A and B Costs
- Part A: This should be free if you have 40 working credits. You can check this by logging into SSA.gov and viewing your account.
- Part B: The premium for Part B is $174.70 per month in 2024 for most people, without an Income-Related Monthly Adjustment Amount (IRMAA). IRMAA is based on income from two years prior, so in 2024, the government will look at your 2022 gross adjusted income.
Drug Plans Costs
In 2024, drug plan premiums can range from $0 to over $100 per month, depending on the plan chosen. However, most clients find plans for less than $20 per month.
Medicare Supplement Plans (Medigap) Costs
Premiums can vary depending on factors such as age, gender location and of course the insurance company. Typical premiums for Plans G and N range between $80-$175 per month and can be more or less depending on the factors just mentioned. For example, a Plan G for a 65-year-old female in Houston, TX ranges between $100-$220 per month depending on the company.
Because the Medigap plans are standardized and carriers charge different prices for the exact same plan, it makes sense to go with a carrier that offers a competitive premium. For example, a Plan N in the same zip code starts at $90 per month for a 65-year-old female.
Overall Cost Recap
- Part A: $0
- Part B: $174.70 per month in 2024
- Part D: $0-$20+ per month on average
- Plan G or N: $80-$150+ per month on average
Average Total: Approximately $300 per month
- Out-of-Pocket (OOP) on Plan G: $240 per year (Part B deductible)
- Plan N OOP: $240 deductible per year, with copayments ranging from $0-$20 at doctors and $50 at the ER unless admitted.
Medicare Advantage Plans
Medicare Advantage plans combine Parts A, B, and D, and are typically $0 per month.
- Part A: $0
- Part B: $174.70 per month
- Part C (Medicare Advantage): $0
Total: $174.70 per month
Out-of-pocket costs on Medicare Advantage plans can vary, with some plans having annual maximums ranging from $3,000 to $7,000. Typically, there will be copayments at the doctor ranging from $0 to $30 per visit, along with other costs for services like emergency room visits, urgent care, and hospital stays.
Additional Recommendations
We recommend considering a Hospital Indemnity plan to help manage out-of-pocket costs if you choose a Medicare Advantage plan. These plans often include riders that cover treatments for cancer, heart attacks, or strokes. Medicare Advantage plans function more like “pay-as-you-use” plans, with low or $0 monthly premiums but potential additional costs when utilizing services.
Keep in mind that most Medicare Advantage plans have network restrictions, so make sure that your doctors are within the plan’s network. Depending on the plan, you may also need referrals to see certain specialists.
If you still have questions about Medicare or you want to compare plan options, feel free to call us at 800-208-4974!
Alex Wender is the founder and CEO of Bluewave Insurance. He has been blogging about Medicare-related topics since 2010. Since then, he and his agency have helped thousands of people across the country choose the right Medicare to fit their needs.
