Because Medicare Advantage plans are sold by private insurance companies instead of Medicare itself, that means that the costs of the plans can fluctuate and vary quite a bit. We are going to look at how 2018 Medicare Advantage premiums are determined and how you can save money on them.
Who Sets the Premiums?
Medicare may get to decide how much coverage a basic Advantage plan offers, but it doesn’t have a say in how much the premiums are. That’s the cost of the plans and how much you pay throughout the year. This is a price that’s determined by the insurance companies that sell these plans and not by Medicare itself.
Because the prices are set by insurance companies, which are private businesses, they can fluctuate throughout the year. They can increase without a lot of notice to those who are not signed up for them, and they can lose or gain value as they change.
Usually, the insurance companies will increase their prices year over year. So, 2018’s prices should be a bit more expensive than 2017’s prices. This is just simple inflation, and not necessarily a reflection on how the value of the plans are changing.
How Premiums Are Determined
While insurance companies get to set the individual prices, it’s the coverage these plans offer that determines how much they are usually set for. As you might imagine, the basic Medicare Advantage Plan would not cost as much as one that has a lot more coverage. The basic plan includes coverage for Medicare Part A and for Part B, as well as for urgent care and emergency care. The more robust and expensive plans may add coverage for Medicare Part D onto that as well as cover for annual checkups.
The insurance companies usually try to make their prices competitive, so they will compare them to the prices of their competitors in their area and make their rates similar, based on how much coverage each is offering. You won’t usually pay a lot more in the same area for two similar Advantage plans from two different insurance companies.
So, as one insurance company increases their pricing, the others may as well, simply because they know that seniors will be willing to pay for that plan at a higher price now.
Of course, there are companies that look to undercut their competitors and always sell cheaper than they do. So, if you do a little looking, you can get some good deals on Medicare Advantage plans. The more of these plans you compare and companies you look at, the better your chances are of finding a very low price.
You can save on 2018 Medicare Advantage premiums, but you will need to do some looking, first. We want to show you a couple of ways that you can save on these medical insurance plans.
Saving Money on Premiums
You may not be able to control how much the insurance companies sell their plans for, but you can determine which one, if any, you choose. It’s up to you to pick the Medicare Advantage plan you want, and if you are eligible for one, then you are eligible for all. You may need to drop a medical coverage plan you already have signed up for. For instance, if you have Medicare Part D already, then you can’t sign up for an Advantage plan that includes Part D coverage until you drop the Part D coverage you have already signed up for.
The best and simplest way to save money on these plans is to figure out what kind of coverage you want to get and then compare plans with similar coverage to that. Compare their prices either on your own or using a price comparison service (which you can find for free online, with a little looking). That way, you know who has the coverage you want at a decent price. You can find the lowest cost version of what you are looking for and save money. Even saving a small amount of money each month is worth choosing one plan over another, because those savings can really add up over time.
Another way to save money on the Advantage Plan premiums is to figure out what kind of coverage you can do without. You may look at many plans that seem to have the kind of coverage you need. They may cover all the medical expenses you are paying for out of pocket or with another insurance plan right now, plus provide you with a small cushion in case of something unexpected coming up. That may be your ideal coverage, but you may not be able to afford it. Even comparing prices may yield nothing that’s affordable for you.
In that case, you need to examine your coverage needs and determine what you could live without. There may be some medical expenses that are cheaper for you to pay from your own finances than to have covered by a Medicare Advantage plan. That usually includes medical expenses that are not very costly on their own or that you only pay a couple of times a year. See what you can do without and look for a lower coverage plan, if you are having trouble finding an affordable one with all the coverage you want. You may be able to find something that’s still decent that fits in your price range a lot better.
For specific pricing information, you will have to look at specific insurance companies and their Advantage plans. The prices change every so often, which is why we have provided a guide on how pricing works and how you can save money on it rather than list a bunch of rates for you that will be outdated at some point. Hopefully you can use this information to save on 2018 Medicare Advantage premiums, when you are ready to sign up for a coverage plan.