Medicare Advantage Plans—How to Decide If They're Right for You | mumble in the jungle

Medicare Advantage Plans—How to Decide If They’re Right for You

medicare advantage plans

Feeling confused over what Medicare Advantage plan to choose? We hear you. Finding out what is better suited for your situation can be hard to grasp at first. But the sooner you get started, the more comfortable you will become with the various terms and types of Advantage plans that are available.

Not to be confused with Medigap, Medicare Advantage differs in basic ways. First, to understand Medicare Advantage, you need a little primer on the fundamentals of Medicare.

Medicare is a government-run program that provides health coverage for retirees. Made of 4 parts, Part A helps cover hospital stays + medically necessary treatments. Part B helps with coverage for visits to the doctor’s office and outpatient medication received. Part C consists of Medicare Advantage plans provided by private insurance companies to encompass Part A, Part B, and more. Part D provides drug costs coverage.

What you need to know: You can either sign up for Part A and B (also known as Original Medicare), or use a Medicare Advantage plan.

Since 2004, the number of people enrolled in Medicare Advantage plans over Original Medicare has more than tripled. What used to be 5.3 million beneficiaries grew to 17.6 million in 2016. So why do people choose a Medicare Advantage plan over Original Medicare? Here are a couple main reasons:

  1. Wider coverage available.

Medicare Advantage plans are for those who want more coverage than what Original Medicare provides. Why? Because Medicare Advantage plans go a step further in providing aspects not covered in Part A and Part B.

While all Advantage plans include what is covered by Original Medicare, hospice care being the only exception. With an Advantage plan you may also get dental, vision, or hearing coverage, depending on the plan you sign up to. Signing up with private insurance companies allows access to a wider range in what you can get covered.

  1. More coverage for less cost.

There are some Medicare Advantage plans that cost nothing more than what Original Medicare charges. But the coverage is generally broader, as mentioned above. For example, Original Medicare does not include drug coverage. And those who require prescription medication will need to purchase a Part D plan along with their Original Medicare. But Medicare Advantage plans typically include drug coverage, too. Kaiser Family Foundation estimates over 80 percent of Advantage plans include drug coverage.

Of course, depending on the breadth of coverage you want, your monthly premium and out of pocket limits will differ from the next person. But flexibility in picking and choosing what you want coverage for is one of Medicare Advantage’s strengths.

  1. Out-of-pocket caps on medical spending.

Something which Original Medicare does not provide is an out of pocket cap on your medical bills. Sky rocketing medical expenses is sadly the norm in the U.S. health care system. Medicare Advantage has a maximum limit out-of-pocket spending cap of $6,700. Afterwhich, insurance companies must foot the bill. This is welcome security to those facing health complications and time spent in hospitals.

There are, of course, some drawbacks to Medicare Advantage plans, and certain people may find that Advantage plans are not a good fit.For example, Advantage plans tend to have a strict network of health professionals (HMOs) you can receive service from. If you live in a rural location, it may be disconnected from an Advantage plan’s network of doctors or health professionals. So if you require a broad selection of doctors within your immediate area, then an Advantage plan may not suit. In which case, you may do better with a Medigap plan.Of course, this also depends in your location, as certain states and cities have broader networks than others.

In all situations, it pays to do your research well beforehand, so that you can make a thoughtful and considered decision, free from time pressure.