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 less 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, also known as Medicare Part C, is offered through private insurance companies.
It includes medical and hospital coverage, plus additional coverages and perks. If you’re already enrolled in Medicare parts A and B, you qualify for a Medicare Advantage plan.
Most Medicare Advantage plans offer the following:
- Hospital coverage. This covers you for hospital visits, nursing facility stays, home healthcare, and hospice care.
- Medical coverage. This covers you for preventive, diagnostic, and treatment-related services.
- Prescription drug coverage. This helps cover some of your prescription drug costs.
- Dental, vision, and hearing coverage. This helps cover yearly screenings and some assistive equipment.
- Additional health perks. This can include additional services, such as 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 are some advantages to Medicare Advantage plans.
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.
In addition, some Advantage plans have no costs for certain premiums or deductibles. Another advantage of choosing Medicare Advantage is that there’s a yearly maximum out-of-pocket amount.
Coordinated medical care
Many Medicare Advantage plans are offered under structures that take advantage of coordinated medical care. This means that any providers you visit will be in communication with each other to provide you with coordinated, effective medical care.
Medicare Advantage plans may also have some disadvantages that Original Medicare does not.
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 may even 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 be limited and costly.
Overwhelming plan offerings
If you’re using the Find a Medicare 2020 Plan tool, you’ll see that there are plenty of Medicare Advantage plan options on the market.
While having options is a good thing, it can also be overwhelming, especially when comparing and choosing health plans. Fortunately, you can use a checklist 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 consolidate these costs into one plan, but you may notice additional fees. For example, drug deductibles and specialist visit copays can add up over time with some Medicare Advantage plans.
Original Medicare offers continuous coverage all over the United States. However, most Medicare Advantage plans only offer coverage specific to your service area. This means that if you travel frequently, your Advantage plan may not cover out-of-state services.
The best Medicare Advantage plan for your needs is determined by a variety of factors. When you’re choosing a Medicare Advantage plan, ask yourself:
- What type of coverage are you looking for? Many Advantage plans include prescription drug coverage, as well as dental, vision, and hearing coverage. If you’re interested in additional perks, you can call around to different companies to see what they have to offer.
- What are your long-term healthcare needs? More than 40 percent of Americans have chronic health conditions. The 2019 CMS star ratings rank plans for chronic health conditions. You’ll also want to consider which plan will suit your long-term medical needs the best.
- What is your monthly and yearly budget for healthcare? Your monthly and yearly Advantage plan costs may include monthly premiums, yearly deductibles, and copays/coinsurance. Some plans do offer $0 premiums and deductibles, but others may charge a few hundred dollars. Don’t forget to consider the out-of-pocket max for your plan.
Medicare Advantage plans are a great option for many Americans who use Medicare coverage. However, if you feel that a Medicare Advantage plan isn’t the best fit for you, you may just choose to supplement your Original Medicare plan.
You can sign up for a Part D plan and Medigap to cover most of your medical needs without having to worry about the restrictions of an Advantage plan.
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 a 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.
- Remember: 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 sit down and review all your options and healthcare needs before choosing the coverage you want.