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How to pick a Medicare plan

When it’s time to choose a Medicare plan, knowing how to select the best plan for you can be intimidating. However, there is a straightforward way to pick the best plan. There is always a balance between the premiums you pay for a health insurance plan and the estimated costs of your medical treatment. Medical expenses shouldn’t be a mystery every year. By doing some simple math, you can choose a Medicare plan that will cover your expected medical costs.

What you need to know about Medicare’s basic expenses includes the premium, deductible, copayments/coinsurance, and out-of-pocket limit. We need to define these concepts before we can begin figuring out prices.

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Important Terminology for Discussing Healthcare Expenses


This is the regular cost of maintaining your current level of protection. You must pay the Part B payment regardless of whether you stay with Original Medicare (Parts A and B) or switch to a Medicare Advantage (Part C) plan.

  • Most persons will pay $164.90 for their Medicare Part B payment in 2023.
  • The Medicare Part A premium (up to $278 in 2022 and $506 in 2023) may be required if you do not have sufficient work credits.
  • Not all Medicare Advantage plans need a supplementary premium, but some do.


A deductible must be met before Medicare or Medicare Advantage begins paying for covered treatments, such as a hospital stay.

  • Medicare Part A has a deductible of $1,600 for the year 2023.
  • The Part B deductible for the year 2023 is $226.
  • To learn about your Medicare Advantage plan’s deductible, you need to review your plan’s documentation.


When you get treatment or fill a prescription under Original Medicare or a Medicare Advantage plan, you will be responsible for paying a fixed amount, known as a copay or copayment. It’s common to spend $25 for an office visit, $40 for a specialist, and $5 for a generic drug. When it comes to Medicare, every plan is different. Expenses have to be included in the documents associated with your plan.


You may be required to pay a portion of the cost of some medical services. This is called coinsurance.

  • Medicare Part A requires you to pay a coinsurance amount of $400 per day for stays longer than 60 days and $800 per day for stays between 91 and 150 days.
  • Medicare Part B requires a 20% co-payment for most covered outpatient procedures.
  • Be sure to review your Medicare Advantage plan’s materials to learn about any applicable coinsurance.

Out-Of-Pocket Maximum

This is the most you will have to spend yearly for insured medical expenses (including copays, coinsurance, and deductibles).

In Original Medicare, there is no cap on how much you’ll have to pay for medical services. For this reason, some Medicare recipients may choose a Medicare Advantage (Part C) or Medicare Supplement Insurance (Medigap) plan.

As mentioned above, a maximum out-of-pocket expense applies to Medicare Advantage plans. The highest amount a patient would have to pay for medical care in 2023 is $8,300 for in-network treatments and might be more for those received outside the network. Some plans may have lower out-of-pocket maximums than others. Your out-of-pocket maximums will be described in the planning policy you choose.

You may avoid paying the Part A and B deductibles and copayments with a Medicare Supplement (Medigap) plan. A few will also pay for your Medicare Parts A and B deductibles. Although both Medigap Plans K and L have maximum out-of-pocket payments, they cover far less than the other plans (e.g., only 50% or 75% of Part B coinsurance instead of 100%).

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A Guide to Expense Estimation

Consider the following options for a Medicare Advantage plan:

  • There will be no further cost.
  • No out-of-pocket costs
  • The highest amount a patient would have to pay out of pocket for in-network treatments is $4,500.
  • Copayments of $25 at the doctor’s office
  • Specialty doctors’ visits cost $40 each.
  • Cost sharing for generic drugs is just $5.

If you don’t need extensive medical attention, your bills would look like this:

  • A Medicare Part B premium of $164.90 multiplied by 12 months equals $1978.80, with any necessary copayments, is the total yearly cost you may expect to bear.
  • If you have three appointments with your primary care physician and one with a specialist, your total copayments will be $90 ($25 * 3 * $25 * $40).
  • The annual cost of your prescription drugs would be $120 ($5 x 2 prescriptions x 12 months) if you took two generic meds and needed to fill them every month.

Your annual out-of-pocket expenses would amount to $2,188.80 if you had to pay the $1978.80 Part B premium plus the $90 for doctor’s appointments and the $120 for medications.

In fact, the vast majority of Medicare recipients will need more extensive treatment than shown here. The cost of treatment might skyrocket if you need to visit many experts, take costly drugs, or spend time in the hospital.

The out-of-pocket limit is intended to prevent this. If your Medicare Advantage plan has a $4,500 out-of-pocket maximum, as previously mentioned, it is the most you will ever have to pay for eligible treatments.

Let’s imagine you’re trying to get a handle on your medical bills, and you realize that if you lived in Oklahoma, they’d be… In addition to Original Medicare, you enroll in Medigap plan N for an additional $201.55. With this plan, your out-of-pocket expenses should be covered, bringing your yearly expenditures to $4,396.60. That includes the $1,978.80 Part B payment and the $2,418.60 Medigap premium.

Our Medicare Plan Experts are here to guide you to the Medicare plan that best meets your requirements if you’re still having trouble deciding which option to go with.

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