As your 65th birthday approaches, you’ve likely begun considering enrolling in Medicare. Many people don’t realize there are different types of Medicare plans and several options to choose from, including Medicare Advantage plans.
There is no single one-size-fits-all Medicare benefits package, and it can be challenging to differentiate between the health insurance options that provide you with the best medical care with minimal out-of-pocket costs.
About 45% of Medicare beneficiaries opt for a Medicare Advantage plan. In this guide, we’ll outline the pros and cons that Medicare Advantage plans offer so that you can make a more informed choice about your health care coverage.
What is Medicare Advantage?
Medicare Advantage plans are an alternative medical insurance to Original Medicare. They combine the benefits of Medicare Part A and Part B (also known as Original Medicare) and include additional benefits through private insurance companies that can reduce out-of-pocket expenses for healthcare services.
While Medicare Parts A and B provide hospital insurance and covered services for doctor’s visits and other necessary medical care, Original Medicare benefits don’t cover routine exams, dental or vision benefits, or prescription drugs.
Medicare Advantage is referred to as Medicare Part C, and Medicare Advantage enrollment requires prior enrollment in Medicare Parts A and B. There are also restrictions to the time of year you can enroll in or switch to Medicare Advantage plans.
Medicare Advantage Versus Original Medicare
At first glance, Medicare Advantage plans can seem very similar to traditional Medicare, making many people wonder whether extra Medicare coverage is necessary.
While Original Medicare might cover the basics, many Medicare Advantage plans provide additional coverage for medical services, including:
- Prescription drug coverage
- OTC medication
- Chiropractic care
- Gym memberships
- Transportation benefits
- Routine dental, vision, and hearing care
Despite the extra coverage provided by a Medicare Advantage plan, it’s possible for Medicare Advantage enrollees to get economical coverage and sometimes zero monthly premiums. There are also out-of-pocket limits to protect Medicare Advantage plan members from unduly high medical costs.
Medicare Advantage Plan Alternatives
For Americans not enrolled in a Medicare Advantage plan, there are other alternatives to having solely Original Medicare.
- Medicare Part D for a prescription drug plan: If you have Original Medicare, you can add Part D coverage for prescription drugs. However, if you have Part D, you cannot have a Medicare Advantage plan.
- Medicare Supplement Plan (also called a Medigap plan): A Medigap policy provides supplemental coverage that helps bridge the gap between what Original Medicare covers and your out-of-pocket costs.
It’s important to keep in mind that you cannot simultaneously have a Medicare Advantage plan and a Medicare supplement insurance plan.
Pros of Medicare Advantage Plans
When you opt for Medicare Advantage coverage, you get the same benefits as original Medicare, along with some extras.
- Get additional coverage: Medicare Advantage plans include additional coverage not available with Original Medicare. For those in their golden years, knowing that they can get more health care coverage at a relatively low cost offers peace of mind.
- Save money: With health care costs on the rise, paying out-of-pocket for medical bills can feel uncertain Not only do Medicare Advantage plans provide additional health care coverage, but all Medicare Advantage plans have a cap on the amount of money you will have to spend out-of-pocket each year.
- Receive coordinated health care: Medicare Advantage plans are structured to include a network of health care providers that can work together to coordinate care with a primary care physician at the helm. Often, these networks are part of a Health Maintenance Organization (HMO), though other structures are also common, including Preferred Provider Organizations (PPO), Private Fee for Service (FFS), and Medical Savings Accounts (MSA). This coordination of care can help Medicare Advantage members cut costs while also elevating the quality of care.
- Get affordable prescription drug coverage: Prescription drug costs can be prohibitively high, and most Medicare Advantage plans include this benefit. While overprescribing medication is never a good thing, the reality is that 39% of seniors take at least five prescriptions.
For Americans that rely on prescription drugs for to battle chronic conditions or maintain their health, a Medicare Advantage plan with prescription drug coverage may be essential.
Cons of Medicare Advantage Plans
Though Medicare Advantage plans come with a lot of selling points, there are some disadvantages of Medicare Advantage.
- Less flexibility: With Original Medicare, beneficiaries can go to any doctor anywhere that accepts Medicare. However, even the best Medicare Advantage plan will likely have restrictions through the insurance company that limits the healthcare providers that you can consult. While you can still potentially see out-of-network physicians, you might pay more for their services. Alternatively, the out-of-pocket fees you pay might not be applicable to your deductible limits.
- Authorizations or referrals may be required: Keeping the network of health providers under a Medicare Advantage plan in mind, beneficiaries may have to wait for authorizations or referrals from their primary care physician to see a specialist.
- Limited provider networks: In addition to having to stick with a predetermined provider network, you might find that you’re limited by the number and quality of providers available. This can be especially true if you are located in a small town or rural area with limited medical provider options.
To sum up, Medicare Advantage plans include a long list of benefits that aren’t available under Original Medicare. For many seniors, these additional benefits are incredibly important because their future health is uncertain, and they don’t want to pay exorbitant out-of-pocket costs for healthcare coverage during their golden years.
For example, Original Medicare doesn’t provide transportation benefits, except in emergencies. This can be problematic for seniors that have difficulty driving or are unable to drive for health or cognitive reasons. Medicare Advantage transportation benefits are one of several benefits that plan beneficiaries can take advantage of.
To determine whether a Medicare Advantage plan is right for you and which one is best suited for your needs, contact the Modern Medicare Agency. Our advisors can assist you in making the right choice for your medical needs and budget.