For some people Medicare Advantage Plans are the perfect solution. For others, not so much. As with many things in life, Medicare Advantage Plans have their pros and cons. Let's take a closer look.
Before we dive in, I will start by defining three Medicare options because I will mention all three options in the following comparisons:
Option 1 - Original Medicare + Part D Prescription Drug coverage includes
Part A (hospitalization),
Part B (physicians).
Part D (prescriptions)
Option 2 - Original Medicare + Medicare Supplemental Insurance (Med Supp or Medigap) includes
Part A (hospitalization),
Part B (physicians),
Part D (prescriptions), and
a supplemental insurance plan to cover deductibles, co-pays and co-insurance.
Option 3 - Medicare Advantage Plan (Part C) includes
Part A (hospitalization),
Part B (physicians),
sometimes Part D (prescriptions), and
possibly additional benefits mentioned below.
Medicare Advantage Plan PROs:
1) Maximum Out of Pocket Cap
Original Medicare has no maximum out of pocket cap. It is a cost-sharing program that typically picks up 80% of the cost and leaves you the remaining 20%. With original Medicare you can expect to pay a deductible, a co-payment, and possibly co-insurance. This is usually manageable for those with minor health issues but when someone experiences an extended hospitalization or a lengthy stay at a skilled nursing facility or expensive tests and treatment, the costs to you begin to add up to hundreds and possibly thousands of dollars.
Medicare Advantage Plans have a maximum out of pocket cap. The dollar amount of the cap is determined by the specific plan you choose.
2) Medicare Parts A & B are Covered by a Medicare Advantage Plan
If you select a Medicare Advantage Plan it will provide all of your Part A and Part B benefits as if you had Original Medicare Parts A & B. Medicare Part D may be included and many Medicare Advantage Plans also include additional benefits such as: vision, dental, hearing, and/or fitness programs. Plans may also offer coverage for transportation to doctor visits, over-the-counter drugs, and services to promote your health and wellness.
3) Low Premium
One attractive feature of the Medicare Advantage Plan is the low monthly premium, sometimes as low as zero dollars for Medicare Part C.
4) Pay for What You Need
A Medicare Advantage Plan resembles traditional health insurance in that you pay only for the services you need instead of pre-paying like you do with a Med Supp. To explain that a bit more, those who select a Med Supp are paying several hundred dollars for insurance premiums every month but when they go to the doctor or hospital there may be no charge for the services, based on the plan they select. Those who select a Medicare Advantage Plan generally have a low or zero dollar monthly premium but when they go to the doctor or hospital they need to pay a co-pay and possibly co-insurance.
Medicare Advantage Plan CONs:
1) Costs are Less Predictable
Because of the co-pays and co-insurance, the costs of medical care are less predictable with a Medicare Advantage Plan than with a Med Supp. Fortunately, there is a Maximum Out of Pocket Cap making them more predictable than Original Medicare. With a Medicare Advantage Plan it is possible to determine the maximum cost per year for medical expenses when planning your annual budget.
2) In-Network Doctors and Facilities
A Medicare Advantage Plan requires you to use in-network doctors and facilities. Some plans require referrals.
TIP: If you are choosing a Medicare Advantage Plan and are a snowbird or someone who enjoys traveling, it is important to select a plan that will allow you to have travel benefits to be able to see in-network doctors or medical facilities in the states where you will be visiting.
Summary:
Over 26 million Americans have selected Medicare Advantage Plans. That is almost twice the number of those who have selected a Med Supp. A Medicare Advantage Plan with its low to zero dollar premium is an attractive solution for those who are in good health and have little need of medical services. Because it has less up front expenses, it can be more affordable for those on a moderate to low income fixed budget, depending on their medical needs.
Selecting the right Medicare Advantage Plan is important. There is no one-size-fits-all solution. When I do the research for my clients, I take into account the medications they are on, the doctors they see, their preferred facility, their travel plans, and any special needs. There are a lot of carriers and each carrier has multiple options so I research carefully to find the plan that best suits my client's needs. This is all done at no charge to the client. If we can assist you with your Medicare selection or answer your Medicare questions, please call 941.315.5801 today to schedule an appointment. We are happy to help!