Is Medicare Advantage Good Deal?

Medicare Advantage (MA or Part C), is a popular alternative to traditional Medicare. Since 2010, enrollment increased 71 percent, with as many as one in every three eligible seniors today choosing an Medicare Advantage plan over Original Medicare. Understanding this option is a critical step in managing health care into retirement. Here are some things to consider, along with a few pros and cons of Medicare Part C.

The Differences Between Original Medicare and Medicare Advantage

Original Medicare is fairly basic. Coverage includes hospital insurance (Part A) and medical insurance (Part B). While Part A is free for most people, Part B carries a monthly premium. Prescription drug benefits (Part D) are not part of Original Medicare, but can be added for an additional monthly premium.

Seniors enrolled in Original Medicare can visit any doctor or hospital they choose, as long as the provider accepts Medicare. While a good percentage of costs are covered, seniors are responsible for out-of-pocket expenses, like deductibles, coinsurance and copays. Many people add Medicare Supplement insurance (Medigap) to help shoulder some of these costs.

By contrast, Medicare Advantage is offered by private insurance companies as an alternative way to receive Original Medicare. With an MA plan, you receive Part A and Part B benefits, as well as additional benefits not covered by traditional Medicare. Most MA plans include coverage for prescription drugs, as well as dental, vision and in some cases, even hearing.

Unlike Original Medicare, with Medicare Advantage, you are limited to doctors and hospitals that are part of a specified network. Networks can be large, or narrow depending on where you live and a referral may be needed to see a specialist. On the up side, Medicare Advantage is inexpensive—average premiums in 2017 were $36 per month. Seniors are saving money—and with access to extra benefits not provided by Original Medicare, Medicare Advantage is an all-in-one plan.

Is Medicare Advantage a Good Deal?

With comprehensive benefits and low premiums, Medicare Advantage sounds like a great deal. After all, putting together a similar plan using traditional Medicare would mean adding a prescription drug premium and maybe even Medigap to shoulder out-of-pocket costs. However, it’s important to look at your needs carefully to decide if Medicare Advantage makes sense for you.

Things to Consider

Network Availability Medicare Advantage may be a good option if the network includes providers you already use. Look carefully at which doctors are in the plan’s network, and whether or not you need a referral to see a specialist.

Out-of-pocket Expenses For those in good health who will don’t expect to visit the doctor’s office or hospital regularly, Medicare Advantage can be a great asset, offering additional benefits at a low cost. If, on the other hand, you will be visiting the doctor frequently and expect to have many copays, traditional Medicare supplemented with a Medigap plan can help with expenses.

The Bottom Line

Medicare Advantage is a great option for seniors looking for comprehensive care at an affordable price. As long as you can work within the network model, and won’t be needing a lot of specialized care, an MA plan may be a good deal.

 

References:

Medicare Advantage Stats: http://www.kff.org/medicare/issue-brief/medicare-advantage-2017-spotlight-enrollment-market-update/

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