Guide to Knowing If Medicare Advantage Is Right for You

For many people, enrolling in a Medicare Advantage plan, also known as Medicare Part C, is no question. It is essentially Original Medicare but with additional benefits and costs a low monthly premium or no monthly premium at all. Plus, it provides coverage through private insurers rather than traditional government-administered Medicare companies. However, there are still various downsides to Medicare Advantage that you should consider.

Why Is Medicare Advantage Becoming More Popular

There’s no denying the temptation of the additional benefits that come with Medicare Advantage, considering some plans include rides to the doctor’s office, meal delivery, dental care, routine vision, etc., all for no additional cost.

In 2020, nearly four in ten (39%) of all Medicare beneficiaries – 24.1 million people out of 62.0 million Medicare beneficiaries overall – are enrolled in Medicare Advantage plans; this rate has steadily increased over time since the early 2000s. Between 2019 and 2020, total Medicare Advantage enrollment grew by about 2.1 million beneficiaries, or 9 percent – nearly the same growth rate as the prior year.

Kaiser Family Foundation.

Advantage plans have drastically increased in popularity over the past few years, mainly because they often have lower premiums and additional benefits. Also, the fact you must buy yet another plan for dental, vision, or hearing when you use Original Medicare is unappealing, making Advantage plans hard to pass up.

Once you turn 65, you’ll start to get targeted by Medicare companies through snail mail or email, trying to convince you they have the best benefits. However, deciding on a plan based solely on freebies is no way to choose health insurance.

In 2021, the average enrollee has around 33 Medicare Advantage plans to choose from, making it pretty overwhelming. It is best to understand how Advantage plans work compared with Original Medicare and decide from there.

Downsides of Medicare Advantage

Medicare Advantage, also known as Medicare Part C, is managed care that can actually cost more in the long run when paired with a Medigap supplemental plan. Private insurance companies sell Advantage plans on contract with Medicare and are required to offer the same benefits as Parts A and B. If you think you don’t pay Part B premiums with an Advantage plan, you are wrong. While an Advantage plan gets you Parts A and B coverage, Part A is generally free, but you still have to pay premiums for both an Advantage plan and Part B.

According to the Kaiser Family Foundation, 19% of Advantage beneficiaries had trouble covering costs in 2018, and only 12% of beneficiaries with Original Medicare and Medigap struggled.

If you try a Medicare Advantage plan and find something you don’t like about it, Medicare’s general enrollment runs every year from January 1 to March 31, with coverage starting July 1. It is essentially a period where you can correct your mistake by switching your plan. However, when switching from an Advantage plan back to Original Medicare and Medigap or vise versa, you may be temporarily underinsured.

Another downside of Advantage plans is difficulty finding doctors in your network. You’ll need to try and find one with thousands of providers, or else your options for in-network specialists will be slim. On the other hand, nearly every physician or hospital accepts Original Medicare.

How to Decide on a Plan

When choosing a Medicare plan, the first thing to consider is if you prefer a higher premium versus higher out-of-pocket costs. If you are leaning towards an Advantage plan, you should be able to set aside the money you save on premiums to pay for out-of-pocket costs later. You never know if you’re going to have a year of bad health, so it’s crucial to prepare for the worst by having saved funds.

Lifestyle is another major factor to consider when choosing a plan. If you have various homes across the country, Original Medicare with a Medigap plan is your best option so that you can visit doctors in different states.

We suggest using the Medicare.gov tool that allows you to compare different Advantage, prescription drug, and Medigap plans accustomed to your needs. The tool estimates how much your specific medications will cost for each Advantage plan you’re interested in. It lists the monthly premium, copays, and maximum out-of-pocket expenses. In addition, it provides information about additional benefits. Also, don’t forget to ensure that the plan’s network includes your preferred hospital or long-term care facility.

The National Association of Health Underwriters represents those who serve healthcare insurance and holds strict standards for those who become certified brokers. That said, Medicare agents cannot push anything on you that you don’t want or need once you sign the required “scope of appointment,” which lists the type of insurance products you want to discuss. It’s a red flag if you speak to an agent who violates that list.

Since it takes time to find the perfect Medicare plan for your needs, experts recommend starting the process as early as possible to ensure you have enough time to consider every option and get questions answered.