If you are Medicare-eligible, you have probably heard of Medicare Advantage Plans (MA Plans). MA Plans are offered by private insurance companies as an alternative to the original Medicare program. In this blog post, we will discuss the biggest advantages and disadvantages of Medicare Advantage Plans. We will also compare and contrast MA Plans with the original Medicare program.
What is Medicare Advantage?
Medicare Advantage is a health insurance plan that is offered by a private company and approved by Medicare. It provides all of the benefits covered under Original Medicare Part A and Part B and often includes additional benefits such as prescription drug coverage, routine dental and vision care, and gym memberships.
A key benefit is that MA Plans are simpler, serving as “all-in-one” alternatives to Original Medicare. These bundled policies encompass Medicare Part A (inpatient and hospitalization), Part B (outpatient care), and usually Part D (prescription drug coverage) within the same plans.
In contrast, Original Medicare beneficiaries purchase coverage a la carte. This can mean paying separate monthly premiums for Part B, Part D, and Medicare supplemental plans, which fill in coverage gaps left by Medicare Parts A and B. (Most people pay no premiums for Medicare Part A).
Another valuable benefit is that Medicare Advantage plans provide extra coverage that’s not available with traditional Medicare. This can include vision, hearing, and dental services, and in some cases, gym memberships, preventive chiropractic care, and stipends for over-the-counter supplements making the plans particularly attractive for beneficiaries.
Access To Care
Provider restrictions
Another downside is that policyholders can be limited to fewer doctors and hospitals. Most MA plans have financial incentives encouraging beneficiaries to use providers within their network, except in emergencies. In contrast, Original Medicare provides access to any provider that accepts Medicare. More than 90% of primary care physicians participate in the Medicare program, making it highly likely beneficiaries will find a primary care physician they like.
Preauthorization and coverage approval
With some Medicare Advantage plans, beneficiaries are required to obtain prior approval or authorization before seeing a specialist, another restriction that does not typically exist with Original Medicare.
The network of providers may change
Unfortunately, with privately managed MA Plans, in-network health care providers may change throughout the year, potentially creating disruptions in care. In contrast, many more providers accept Original Medicare, and this list tends to be more stable.
What Are Some Of The Costs?
Medicare Advantage plans often charge little or nothing in monthly premiums. But like Original Medicare, Medicare Advantage requires that beneficiaries pay Part B premiums, currently $170.10 per month. Some of the plans, however, provide financial assistance to help beneficiaries meet the Part B premium.
The cost for MA Plans are not standardized. The overall costs of the plans vary depending on the providers, specific plans, and ZIP codes (specific areas) of beneficiaries.
Medicare Advantage plans are not necessarily cheaper or even a better deal than the Original Medicare program. Medicare beneficiary costs are driven, in large part, by the health of the beneficiary and the use of health care services.
Health care costs vary based on your medical care
An important downside is that your total costs will fluctuate based on how much health care you need.
Many beneficiaries assume that Medicare Advantage plans are cheaper alternatives because their monthly premiums are often low or even nonexistent. But most of the costs with Medicare Advantage plans come from copays, coinsurance, deductibles, and other out-of-pocket costs that emerge as part of the overall care process.
And these costs can quickly escalate. If you need expensive medical care, you could end up paying more out of pocket than you would with Original Medicare.
Who Would Benefit The Most From a Medicare Advantage Program?
Medicare Advantage plans are best suited for healthy beneficiaries who don’t use many health care services. With a Medicare Advantage plan, this type of policyholder could come out ahead, paying little in the way of premiums and copays while taking advantage of perks to staying healthy such as gym memberships, which are offered as part of some plans.
Plans are built for different people with different needs. Always keep in mind. There may be a plan that is a perfect fit for you.