Medicare Advantage plans, commonly referred to as Part C, is a bundled alternative to original Medicare and provided by private insurance companies contracted by the federal government to provide health benefits to people who qualify for Medicare.
How Does Medicare Advantage Work?
Medicare Advantage plans must provide the same benefits as Medicare Part A, which covers hospitalization, and Medicare Part B, which covers doctor visits. Additionally, these plans typically include Medicare Part D prescription drug coverage and often offer benefits not covered by Original Medicare, such as routine dental care, eye exams, glasses, and hearing aids.
Pros and Cons of Medicare Advantage Plans
Nearly half of all people eligible for Medicare are in Medicare Advantage plans. Like all plans there are pros and cons and will require research and due diligence to find out if Medicare Advantage plans are the right fit for you.
Pros:
- Extra Benefits: Medicare Advantage plans usually include additional benefits like some coverage for hearing, dental, and vision care, which are not covered by Original Medicare.
- Lower Costs: Many Medicare Advantage plans have no monthly premiums, and out-of-pocket costs may be lower than those associated with Original Medicare.
- Spending Caps: These plans often have limits on how much you may pay out-of-pocket for hospital and medical coverage. In 2024, this limit can be as high as $8,850, as determined by the Centers for Medicare & Medicaid Services.
- Drug Coverage: Most Medicare Advantage plans include prescription drug coverage as part of the plan.
- All-in-One Care: You can receive your hospital, medical, and drug benefits through one insurance company, which can simplify your healthcare management compared to Original Medicare.
Cons:
- Provider Choice: With Medicare Advantage, you generally need to use providers within your plan’s network.
- Travel Restrictions: Many plans require that you live and receive nonemergency medical care within the plan’s geographic service area.
- Less Plan Flexibility: If you’re enrolled in Medicare Advantage, there may be restrictions, notably around the time of year, on switching back to Original Medicare with a Medigap policy.
- Prior Authorization Requirements: You may need approval from your Medicare Advantage plan for certain tests or procedures, which can delay care.
- Plan Restrictions: Unlike Original Medicare, you might need a referral from your primary care physician each time you see a specialist.
- Potential Instability: There’s a possibility that your Medicare Advantage plan could end coverage, either by the insurer or the network and its included medical providers. If this happens, you’ll be notified and offered other options.
Medicare Advantage by State
Medicare Advantage plan availability varies by location by state and counties within states.
How to Choose a Medicare Advantage Plan
When comparing Medicare Advantage plans, it’s essential to understand your healthcare needs and what each type of plan offers. If you have a chronic health condition and wish to continue seeing a specific doctor or facility, ensure the plan you choose includes them. If you take prescription drugs, some plans may offer lower out-of-pocket costs than others.
Here are some key questions to ask when evaluating Medicare Advantage plans:
- Do you need a referral to see specialists?
- What benefits does each plan include? (For example, do you need vision or dental coverage, and are these included?)
- Are all your prescription drugs covered, and what will they cost?
- Are your doctors included in the plan’s network?
- What is the plan’s Medicare star rating?
- What are the plan’s deductibles, coinsurance, and copays?
- What is the plan’s out-of-pocket maximum?