6 Things You May Not Know About Medicare Advantage That Could Cost You
Key takeaways:
A Medicare Advantage (MA) plan can be a cost-effective alternative to original Medicare if you choose a plan that fits your needs.
When you’re shopping around, examine the prescription medication coverage that’s bundled into the MA plans that you’re considering or compare Part D prescription plans if you need to buy one separately.
Unlike original Medicare, most MA plans include prescription coverage, all have out-of-pocket limits, and some require no premium beyond what you already pay for Medicare Part B.
Table of contents
If you become eligible for Medicare, you can elect original Medicare (Part A and/or Part B) or choose a Medicare Advantage (MA) plan, also known as Part C.
Medicare passed a tipping point between traditional coverage and alternative private plans known as Medicare Advantage (MA) in 2024. A Centers for Medicare & Medicaid Services (CMS) analysis of nearly 67 million people enrolled in Medicare as of November 2023 showed that original Medicare retained a slight majority: 51% were enrolled in traditional coverage, versus 49% in MA.
Medicare Advantage gained its numeric edge in January 2024. As of September 2024 — the latest CMS figures available — the percentage split was 50-50 for the 68 million enrolled, but 34.3 million were covered by MA and 33.6 million had original Medicare.
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Medicare Advantage open enrollment happens each year from January 1 to March 31. If you want to switch from original Medicare to an MA plan, you have to make that adjustment during the Medicare open enrollment period from October 15 to December 7.
MA plans offer an attractive alternative to original Medicare because they cover all of the same hospital and medical services while offering extra benefits, such as vision, dental, and prescription coverage. Also, out-of-pocket costs may be lower for people enrolled in MA plans.
However, overlooking important details when opting for MA or choosing a specific plan can be a costly mistake. Below, we explore six missteps you could make with an MA plan that could add up.
Here are 6 focus areas to explore when considering a Medicare Advantage plan:
Zero-premium plans
With MA plans, you still pay your original Medicare Part B premium, and it’s usually deducted from your monthly Social Security payment. In 2025, the Part B premium is $185 per month for most people and up to $628.90 for people with higher incomes.
Some MA plans require an additional premium, but there are “zero-premium” MA plans — which allow you to have more benefits than original Medicare without paying more. These plans have become more widely available. In 2025, 67% of MA plans with prescription coverage are considered zero-premium.
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With zero-premium plans, you remain responsible for meeting your deductible as well as copays and coinsurance, but you have an out-of-pocket limit on those costs.
Out-of-pocket limits
Unless you have a Medicare supplement plan (Medigap), original Medicare has no cap on what you can spend out of pocket. But MA plans do.
Out-of-pocket limits among MA plans vary, but there is a maximum amount set every year for all plans. In 2025, the out-of-pocket maximum for MA plans is $9,350 for in-network services, or $14,000 for in-network and out-of-network services combined.
Pros and cons of extra benefits
MA plans offer many benefits that original Medicare plans don’t. While MA plans typically cap extra benefits, you could potentially get coverage for:
Dental care, including dentures
Hearing care, including hearing aids
Meals
Vision care, including eye exams and glasses
Depending on the care you need, choosing an MA plan with an additional premium may be worth considering. But spending the extra money doesn’t make sense for everyone.
Part D prescription coverage
The wrong Part D prescription plan — either standalone or rolled into an MA plan — could end up costing you hundreds of dollars more than a plan that covers the medications you need.
That’s why it’s important to review the formulary for prescription coverage bundled in your MA plan or any separate Part D plan you’re considering. You should look for a plan that covers your medications in the lowest (and least costly) tiers possible.
Most MA plans, but not all, include Part D coverage. If the MA plan you choose does not include prescription coverage, you can buy a stand-alone Part D plan. The average Part D premium is expected to be $46.50 a month in 2025.
You can enter your medications in the Medicare plan finder tool to generate suggested Part D plans that would be best for you.
Medicare Part D changes in 2025
In 2025, there are several important updates to Part D that can help enrollees save money or manage out-of-pocket costs:
No more “donut hole”: The Part D plan design had four phases in 2024 but now has three. This is because the coverage gap known as the donut hole has been eliminated. Now, you have the deductible phase, which lasts until you spend $590 on covered prescriptions in 2025. Then you enter the initial coverage phase, when you are responsible for copays and coinsurance for all covered prescriptions until you spend $2,000 out of pocket. That’s when you reach the catastrophic phase. At this point, you have no cost sharing for covered medications and your plan pays at 100%.
$2,000 out-of-pocket limit: In 2024, there was an $8,000 out-of-pocket cap. But now you’ll need to spend only $2,000 on covered medications before your cost sharing ends and your plan pays at 100%.
Medicare Prescription Payment Plan: This new payment option lets you spread your costs for covered prescriptions over the year. The plan won’t save you money, but monthly payments can help you manage costs during 2025. You can also avoid paying the entire $590 deductible up front and fill your prescriptions on time.
Out-of-network care
If you’re enrolled in an MA plan, you will have a provider network. This network includes healthcare providers, hospitals, and other facilities that are covered under your plan. When shopping around for an MA plan, make sure the providers and facilities you use most often are in the network of any plan you’re considering. Seeing an out-of-network provider can be costly.
Healthcare professionals and facilities can be dropped or added to a plan’s network throughout the year. So it’s always a good idea to double-check that a provider or facility you’re planning to visit is still in your plan’s network in order to prevent unwelcome surprise bills.
Some MA plans require approval, known as prior authorization, before covering certain services, items, or medications. If you have an existing MA plan, it’s important to review the Annual Notice of Change (ANOC) sent by your plan in the fall. This document will tell you what changes to expect in the next coverage year, so you can decide if the MA plan still fits your needs.
Higher coverage denials
Some Medicare beneficiaries don’t realize they can appeal a payment or coverage decision. If you disagree with a decision from your MA plan, you have the right to dispute it. The appeals process can be time-consuming, but with persistence and good record-keeping, most decisions are partially or fully overturned.
You have the right to appeal decisions involving:
A request for a healthcare service, item, supply, or prescription medication you believe you are eligible to receive
A request for payment of a healthcare service, item, supply, or prescription medication that you already received
A request to change the amount you must pay for a healthcare service, item, supply, or prescription medication
A situation in which your MA plan stops providing or paying for all or part of a healthcare service, item, supply, or prescription medication you determine you still need
If you decide to appeal a decision, ask your healthcare provider for information that can help your case.
MA plans aren’t perfect. A 2022 federal analysis of MA appeals by providers and enrollees found that nearly 1 in 5 payment denials were for claims that met Medicare coverage rules. The most common healthcare services that won appeals included:
Advanced imaging services, such as MRIs and CT scans
Stays in post-acute facilities, such as inpatient rehabilitation facilities
Pain management injections
The bottom line
Medicare Advantage (MA) plans can be tricky to navigate. Finding the best one for your needs requires shopping around.
To avoid costly missteps, pay attention to plan details such as out-of-pocket limits, zero-premium options, and extra benefits. If you don’t choose a plan that includes prescription coverage, you may need to buy a separate Part D plan that covers your medications.
Once you have an MA plan, remember to go to healthcare providers in your network and take action by filing an appeal if a claim is denied.
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References
CMS.gov. (2024). Medicare Advantage and Medicare prescription drug programs to remain stable as CMS implements improvements to the programs in 2025.
Freed, M., et al. (2024). Medicare Advantage 2025 spotlight: A first look at plan premiums and benefits. KFF.
Medicare.gov. (n.d.). Explore your Medicare coverage options.
Medicare.gov. (n.d.). Filing an appeal.
Medicare.gov. (n.d.). What original Medicare covers.
Medicare.gov. (2025). Understanding your Medicare Advantage Plan’s provider network.
U.S. Department of Health and Human Services Office of Inspector General. (2022). Some Medicare Advantage organization denials of prior authorization requests raise concerns about beneficiary access to medically necessary care.
