Medicare Part C, commonly called Medicare Advantage, costs most enrollees surprisingly little in plan premiums. The national average monthly premium across all Medicare Advantage enrollees is estimated at just $14.00 for 2026, and two-thirds of plans charge no additional premium at all beyond what you already pay for Part B. But the plan premium is only one layer of cost. Your total spending depends on the Part B premium you’re required to keep paying, copays when you use services, and how much you spend before hitting your plan’s out-of-pocket cap.
The Premiums You’ll Actually Pay
Medicare Advantage has two premium layers. The first is your standard Part B premium, which every Medicare Advantage enrollee must continue paying. In 2026, that’s $202.90 per month. You can’t avoid this cost by choosing Advantage over Original Medicare.
The second layer is the plan-specific premium charged by the private insurer offering your Advantage plan. This is where the numbers get appealing. Nearly all Medicare beneficiaries (98%) have access to at least one plan in their area that charges $0 for this second premium. That means your only monthly premium cost would be the $202.90 Part B payment. Some plans do charge additional premiums, particularly those with richer benefits or broader provider networks, but the majority of enrollees pay nothing extra. Across all 2,989 Medicare Advantage plans with drug coverage open for general enrollment in 2026, the average plan premium works out to $14.00 per month when you include everyone paying $0.
Costs When You Use Care
The monthly premium is only part of the picture. Medicare Advantage plans use copayments and coinsurance each time you see a doctor, visit a specialist, get lab work, or receive hospital care. These amounts vary significantly from one plan to another, so comparing plans means looking beyond the premium to what you’ll owe at the point of care. A $0-premium plan with high copays can cost more overall than a plan with a modest monthly premium but lower cost-sharing, especially if you use healthcare frequently.
Most plans also have a deductible, the amount you pay out of pocket before the plan starts covering costs. Some plans set this at $0 for medical services, while others require several hundred dollars. Drug coverage within the plan typically has its own separate deductible.
Out-of-Pocket Maximums
One of the biggest financial protections in Medicare Advantage is the annual out-of-pocket limit. Original Medicare has no cap on what you can spend in a year, but every Advantage plan is required to set one. In 2025, that cap can’t exceed $9,350 for in-network services or $14,000 when combining in-network and out-of-network care. Many plans set their limits well below these maximums.
Once you hit your plan’s cap, the plan covers 100% of your covered services for the rest of the year. This ceiling is especially valuable if you face a hospitalization, surgery, or other major medical event. It’s worth comparing these limits across plans, because a lower out-of-pocket maximum can save you thousands in a bad year even if the monthly premium is slightly higher.
Prescription Drug Costs
Most Medicare Advantage plans bundle Part D prescription drug coverage, and a major cost protection now applies. Starting in 2025, out-of-pocket spending on covered prescription drugs is capped at $2,000 per year. This cap will rise modestly each year, indexed to the growth rate of Part D costs, but it replaces a system where some enrollees faced unlimited drug expenses. The $2,000 cap applies only to drugs covered under Part D and doesn’t include medications administered in a doctor’s office or hospital (those fall under Part B).
If your Advantage plan includes drug coverage and you didn’t enroll when you were first eligible, a late enrollment penalty applies. You’ll pay an extra 1% of the national base beneficiary premium ($38.99 in 2026) for every month you went without creditable drug coverage after your initial enrollment window. That penalty is permanent and gets added to your monthly premium. Someone who went 14 months without coverage, for example, would pay an extra $5.50 per month in 2026, and that penalty stays with them for as long as they have Part D coverage.
HMO vs. PPO: How Plan Type Affects Cost
Medicare Advantage plans come in two main flavors, and your choice affects what you’ll spend. HMO plans generally require you to use in-network providers. If you go out of network (except for emergencies, urgent care while traveling, or dialysis), you’ll typically pay the full cost yourself. PPO plans give you the flexibility to see out-of-network providers, but you’ll pay higher copays or coinsurance for doing so. Premiums and deductibles between HMOs and PPOs are often similar, so the real cost difference shows up in how you use care. If you’re comfortable staying within a network, an HMO can keep costs predictable. If you travel often or want to see specialists without referrals, a PPO offers more freedom at a higher per-visit price.
Income-Related Surcharges
Higher-income enrollees pay more for Medicare, and this applies to Advantage plans too. If your modified adjusted gross income from two years prior exceeds certain thresholds, you’ll owe a monthly surcharge on both your Part B premium and the prescription drug portion of your plan. For the drug coverage surcharge in 2026, the income thresholds and extra monthly costs break down as follows:
- Single filers earning $109,001 to $137,000 (or joint filers $218,001 to $274,000): extra $14.50 per month
- Single filers earning $137,001 to $171,000 (or joint filers $274,001 to $342,000): extra $37.50 per month
- Single filers earning $171,001 to $205,000 (or joint filers $342,001 to $410,000): extra $60.40 per month
- Single filers earning $205,001 to $499,999 (or joint filers $410,001 to $749,999): extra $83.30 per month
- Single filers at $500,000 or above (or joint filers at $750,000 or above): extra $91.00 per month
These surcharges are based on your tax return from two years before the current coverage year. So 2026 surcharges are calculated from your 2024 income (or 2023 if 2024 isn’t yet available). If your income has dropped significantly due to retirement, divorce, or other life changes, you can appeal to Social Security for a reduction.
A Realistic Monthly Cost Estimate
For most Medicare Advantage enrollees, the baseline monthly cost is the $202.90 Part B premium plus $0 to $50 for the plan premium itself. A typical enrollee choosing a $0-premium plan pays only the Part B amount each month before any care is used. On top of that, you’ll face copays at each visit, potential deductibles, and drug costs up to the $2,000 annual cap. Your total annual spending depends heavily on how much care you need: a healthy year might cost you under $3,000 total, while a year with a major health event could run up toward your plan’s out-of-pocket maximum before the plan covers everything else.
Comparing plans means weighing four numbers together: the monthly premium, the deductible, typical copays for the services you use most, and the annual out-of-pocket limit. A plan that looks cheap on the premium line can cost more overall if its copays and maximum are high.