Medicare Advantage plans are a popular private insurance alternative to Medicare. However, there are some pros and cons to Medicare Advantage.
While some Medicare Advantage plans offer long-term savings, plan flexibility, and better care, others can lead to fewer provider options, additional costs, and lifestyle challenges.
In this article, we’ll explore some advantages and disadvantages of Medicare Advantage plans, as well as how to enroll yourself or a loved one in Medicare.
Medicare Advantage (Medicare Part C) plans are Medicare plans, sold by private insurance companies, that combine original Medicare (Medicare Part A and Medicare Part B) coverage and additional benefits. Most Medicare Advantage plans offer the following benefits:
- some home healthcare services
- hospice care
- doctor visits
- prescription drug coverage
- preventive care
- SilverSneakers fitness memberships
There are different types of Medicare Advantage plans to choose from, including:
- Health Maintenance Organization (HMO). HMO plans utilize in-network doctors and require referrals for specialists.
- Preferred Provider Organization (PPO). PPO plans charge different rates based on in-network or out-of-network services.
- Private Fee-for-Service (PFFS). PFFS plans are special payment plans that offer provider flexibility.
- Special Needs Plans (SNP). SNPs help with long-term medical costs for chronic conditions.
- Medical Savings Account (MSA). MSA plans are medical savings accounts paired with high deductible health plans.
Compared to original Medicare, there may be advantages if you choose a Medicare Advantage plan.
Convenient coverage options
Original Medicare only offers two types of coverage: hospital insurance and medical insurance. If you want additional coverage, you’ll need to purchase Medicare Part D for prescription drug coverage and Medigap for supplemental coverage.
With a Medicare Advantage plan, all your coverage options are in one convenient plan.
Personalized plan structures
Medicare Advantage offers different plan types for your personal situation. For example, if you have a chronic health condition, an SNP Advantage plan can help with your medical costs. If you prefer provider freedom, a PPO or PFFS plan may be more of what you’re looking for. If you want extra services like dental, vision, or hearing, many Advantage plans include them.
Many Advantage plans have no premiums and offer low or no deductibles. Another advantage of choosing Medicare Advantage is that most plans set limits on the maximum out-of-pocket costs you may pay.
Coordinated medical care
Many Medicare Advantage plans include coordinated medical care. This means that your healthcare providers actively communicate to coordinate your care between different types of healthcare services and medical specialties. This ensures you have a healthcare team and helps avoid unnecessary expense, testing and helps avoid things like medication interactions.
While most people are satisfied with their Medicare Advantage coverage, Medicare Advantage for some people, Advantage plans may also have disadvantages compared to original Medicare.
Limited service providers
If you choose one of the more popular Medicare Advantage plan types, such as an HMO plan, you may be limited in the providers you can see. You will usually face higher fees if you choose to an out-of-network provider with these plans.
Other plan types do give you more provider freedom, though those plans may have higher premiums and fees like copays and deductibles.
Complex plan offerings
Using Medicare’s Find a Plan tool, you’ll see that there are many Medicare Advantage plan options depending on your zip code. For some people, all these options can feel overwhelming.
Check out our Tips for choosing a Medicare Advantage plan article to help you narrow down which Medicare Advantage plans are best for you.
Additional costs for coverage
Original Medicare charges a premium, deductible, and coinsurance for both parts A and B, plus any Part D or Medigap costs.
Medicare Advantage plans costs often consolidate these fees into one plan, but you may notice additional fees. For example, many Advantage plans include drug deductibles and specialist visit copays.
Original Medicare offers similar coverage all over the United States. However, Medicare Advantage plans may only offer specific coverage to specific service areas. This means that if you move to a new service area, your current Advantage plan may be available.
How to find the best Medicare Advantage plan for your needs
Choosing the best Medicare Advantage plan for your needs can be complicated. There are many things to consider before you decide.
When you’re choosing a Medicare Advantage plan, ask yourself:
- How much did I spend on healthcare last year or the year before? This may help determine your budget – how much you can afford to spend on premiums and out-of-pocket costs. Some plans do offer $0 premiums and deductibles, but others may charge a few hundred dollars.
- What prescription drugs do I take or will I need? If you take medication, you’ll need to find an Advantage plan that includes prescription drug coverage or purchase a Part D plan. Be sure to search any plans drug lists (formulary) to confirm your medications are covered.
- What types of coverage do I need? Many Advantage plans include extra coverage such as dental, vision, and hearing. You can contact carriers to see what their plans have to offer.
- What medical conditions do I have, and what are my long-term healthcare needs? More than 40 percent of Americans have chronic health conditions. You’ll also want to consider which plan will suit your long-term medical needs the best.
- Does my healthcare provider accept Medicare or do they participate in an HMO network? If keeping your current healthcare provider is important to you, you will need to know what Medicare plans they accept or participate in.
- What is the CMS rating for the plans I’m considering? The Centers for Medicare & Medicaid Services (CMS) uses a Five-Star Rating System to measure the quality of care provided by Medicare Advantage and Part D plans. The CMS star rating measures things like management of chronic conditions, availability of care, member experience and complaints, customer service, drug pricing, and more. CMS releases its star ratings every year.
tips for enrolling
If you or a loved one is enrolling in Medicare, here are a few important things you should know:
- You can apply for Medicare 3 months before you turn 65. If you receive social security benefits, your enrollment is automatic.
- Apply online through the Social Security department here.
- You can also apply for Medicare when you turn 65 or the 3 months following, but you risk a lapse in coverage and late enrollment penalties.
- You can apply for Medicare if you’re younger than 65 if you have disabilities or end-stage renal disease.
- To apply for Medicare, make sure you have place and date of birth, Medicaid number, and current health insurance information of the applicant.
- Once you’re accepted into Medicare parts A and B, you’ll become eligible for Medicare Advantage. You can use the Find a 2020 Medicare plan tool to find a list of Medicare Advantage plans in your area.
- After you’re accepted into Medicare, you have up to 63 days to choose either Part D or a Medicare Advantage plan to cover your prescription drug needs.
- Medicare Advantage offers many benefits to original Medicare, including convenient coverage, multiple plan options, and long-term savings.
- There are some disadvantages as well, including provider limitations, additional costs, and lack of coverage while traveling.
- Whether you choose original Medicare or Medicare Advantage, it’s important to review healthcare needs and Medicare options before choosing your coverage.
The information on this website may assist you in making personal decisions about insurance, but it is not intended to provide advice regarding the purchase or use of any insurance or insurance products. Healthline Media does not transact the business of insurance in any manner and is not licensed as an insurance company or producer in any U.S. jurisdiction. Healthline Media does not recommend or endorse any third parties that may transact the business of insurance.