The Pros and Cons of Medicare Advantage Plans
Original Medicare consists of two main coverage sections: Part A, or hospital insurance, and Part B, medical insurance, both of which are overseen by the federal government.
Related: All About Part A and Part B
Comparatively, Medicare Advantage (aka Part C) plans are issued by private carriers, combine Parts A B into a single policy, and provide coverage through Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Private Fee-For-Service (PFFS) plans.
Related: Medicare Part C Coverage Basics
Because of this convenience, more than 25 percent of all Medicare beneficiaries sign up for these privately-run plans. Still, they’re not necessarily for everyone.
In this article, we’ll briefly outline some of the advantages and disadvantages related to Medicare Advantage plans, what this might mean for you in the real world, and where you can turn when you’d like to learn more.
What are Some Potential Benefits of Medicare Advantage Plans?
Broader, More Personalized Coverage
By law, third-party Advantage plans must deliver all of the same benefits as Original Medicare. However, Advantage plans often go above and beyond by offering additional coverage not provided under Original Medicare. Examples include routine vision and dental care, hearing aids, prescription drugs, and fitness memberships.
Bottom line: When it comes to coverage under Original Medicare, you get what you get. Advantage plans, on the other hand, have a wide variety of options built in that might better accommodate your specific needs and preferences.
Cost Savings & Affordability
When it comes to Original Medicare, you could pay up to $458 per month for Part A, depending on the length of time you paid Medicare taxes before becoming an enrollee, not to mention your $1,408 deductible for each benefit period. Plus, you can add $144.60 per month for Part B’s standard premium.
On the other hand, while each carrier determines their own Advantage plan rates based on factors like your age, location, health status, and so forth, you could pay as little as $0 per month for your premium, in some instances.
You could also have lower deductibles and copayments under a Medicare Advantage plan, reducing your costs even more compared to Original Medicare.
Furthermore, Advantage plans usually come with out-of-pocket maximums, whereas “the sky’s the limit” when it comes to these same costs under Original Medicare.
Michael Steele, IHS Insurance Group’s Principal Owner, points out, “Medicare Advantage plans are typically less expensive than Original Medicare Medigap policies, but they also come with higher out-of-pocket costs and are networked. In fact, if you receive treatment from an non-network provider, your out-of-pocket expenses could be as high as $10,000!”
Finally, while you’ll have to pay separately for each of these costs with an Advantage plan, Medicare Advantage plans consolidate these costs into a single, convenient plan.
In-Network Coordination
Speaking of convenience, because Advantage plans are offered through HMO and PPO networks, communication is often more streamlined between doctors and specialists across different medical centers. Compared to Original Medicare, where disparate doctors and facilities often have different communication procedures and systems.
What are Some Potential Disadvantages When It Comes to Medicare Advantage Plans?
Analysis Paralysis
While it’s usually more beneficial to have a greater number of choices (regardless of the decision you’re trying to make), the sheer number of Medicare Advantage plans available on the marketplace can be overwhelming.
This is where the professionals at IHS Insurance Group can help!
Network Restrictions
While going through an HMO or PPO’s network can streamline communication between doctors and specialists, it could also restrict your options to professionals within that network. Networks are often state and regional-based, which could leave you footing your costs if you travel frequently and need to seek care from an out-of-network doctor (as just one example).
Along these same lines, HMO Advantage plans typically require that you assign a primary physician, who can authorize specialist referrals, whereas PPO plans will often allow you to visit any doctor or hospital that accepts Medicare.
IHS Pro Tip: Regardless of the Advantage plan you choose (PPO vs. HMO), you should always remain up-to-date about doctors in your network, as they can change frequently.
Comparatively, Original Medicare enrollees can locate and visit specialists on their own.
Potential Additional Advantage Plan Fees
We mentioned earlier that Advantage plans consolidate costs like deductibles, copayments, and so forth into a single plan, whereas you’ll pay separately under Original Medicare.
However, some Advantage plans might come with additional costs not present under Original Medicare, such as drug deductibles and specialist visit co-pays, which could add up over time and negatively impact the overall value you achieve.
How Can You Learn More About the Advantages and Disadvantages of Medicare Advantage Plans?
When it comes to choosing between Original Medicare and a Medicare Advantage plan, some good questions to ask yourself include:
- What coverage am I looking for? Do you need coverage for prescription drugs, dental, vision, and hearing, along with additional perks? Or, can you go with something more basic?
- Do I have chronic health conditions? If so, you’ll need to select a plan that can sufficiently address your long-term healthcare needs.
- What’s my monthly and yearly budget? After pulling together your premiums, deductibles, and copayments, you want to make sure you can comfortably afford the coverage you need.
There are also several pros and cons to balance, many of which we covered in this article.
Before you become overwhelmed with all of these choices, though, IHS Insurance Group’s years of experience can help you choose a Medicare Advantage plan that meets your coverage and budgetary needs, based on your lifestyle and personal preferences.
In the meantime, if you’d like to instantly view up to 15 competitive carriers, review coverage details, and compare rates before speaking with one of our licensed agents, please click this link and be directed to our online quoting portal.
Need a FREE Quote or have questions regarding Medicare Coverage? We have three convenient ways to reach us:
- If you prefer to talk to a licensed agent directly, please call (866) 480 5063.
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- Lastly, for those that want an immediate quote, please click HERE.
Also, check out our Medicare FAQ’s here.
