The biggest decision when making your annual Medicare choices is whether to go with Original Medicare or a Medicare Advantage plan (also known as Medicare Part C) from a private health insurer.
There’s no right answer for everyone. But Medicare Advantage plans—the type you’ve seen in TV ads with celebrities—do have pros and cons you’ll want to consider before deciding whether to enroll.
One of the biggest differences between Part C plans and Original Medicare (also known as fee-for-service) is that Medicare Advantage often has limited networks of doctors and hospitals and charges you more to see out-of-network providers—if you’re allowed to see them at all.
You’ll need to make the Medicare Advantage vs. Original Medicare choice soon: Medicare’s Open Enrollment period for 2024 is October 15 to December 7. From January through March 2024, you can switch Medicare Advantage plans or drop Medicare Advantage and return to Original Medicare.
Increasingly, Medicare beneficiaries are gravitating towards Medicare Advantage plans—largely because they think they’ll pay less for their health care than with Original Medicare and receive extra benefits. This year, for the first time, 50% of Medicare beneficiaries will be in Medicare Advantage plans. In 2018, just 37% were.
The average Medicare beneficiary can choose among 43 Medicare Advantage plans, according to a KFF research report. Altogether, there are nearly 4,000 plans nationwide.
Before signing up for a Medicare Advantage plan, you need to enroll in Original Medicare Part A (hospital insurance) and Part B (medical insurance). Most plans include Medicare Part D prescription drug coverage. But if you’re in a Medicare Advantage plan, you can’t buy a supplemental Medigap policy, as you might with Original Medicare.
Here's a rundown of the pros and cons of Medicare Advantage plans.
Pros of Medicare Advantage plans
Potentially lower out-of-pocket costs than Original Medicare
For example, some Medicare Advantage plans have $0 premiums and can help pay all or part of your Part B premium ($164.90 a month in 2023 and expected to rise by about 3% next year). Upper-income Medicare beneficiaries, however, pay a surcharge that, in 2023, raises their Part B monthly premiums to as much as $560.50.
But, notes author Diane Omdahl in her book, Medicare for You, those $0 premium plans may have steep out-of-pocket costs requiring you to write checks for diagnostic studies, hospitalizations, specialists and outpatient care. So, don’t be fooled by a $0 premium come-on.
Some Medicare Advantage plans also charge additional premiums of up to $200 a month, though the average is $18.
Unlike Original Medicare, which a 20% coinsurance for Part B services including doctor’s visits, most Medicare Advantage plans have flat fee co-pays, which will be lower. But the plans often require higher co-pay and co-insurance amounts when you see out-of-network providers.
Medicare Advantage plans have annual out-of-pocket limits for Part A and Part B services; Original Medicare does not: In 2023, the Medicare Advantage cap is $8,300 for in-network services and $12,450 for out-of-network.
Some Medicare Advantage plans have no annual deductible. Others typically require the amount of the Part B and Part D deductibles, according to the National Council on Aging.
Benefits that Original Medicare can’t offer
Medicare Advantage plans must offer all the same basic coverage Original Medicare does, and many provide other types of benefits, too.
Those frequently include dental care, routine vision care and hearing care, though this coverage may be restricted. For instance, dental care may only cover one cleaning a year or the dollar amount in dental benefits may be capped at $1,000 or less. Vision coverage has dollar limits, too; the average annual limit is about $160.
Some Medicare Advantage plans also provide prepaid cards for medications, health supplies, bathroom safety devices and caregiver support. In addition, there are often non-medical benefits like gym memberships or discounts, subsidized meals or groceries, trips to the supermarket or bank and support to reduce isolation.
No enrollment rejections due to pre-existing conditions
Medicare Advantage plans can’t turn you down because of your health status.
Better satisfaction levels and coordinated care than Original Medicare
Two health research studies found these results.
The first, a 2021 Commonwealth Fund analysis, said “Medicare Advantage enrollees do not differ significantly from beneficiaries in traditional Medicare in terms of their…satisfaction with care or access to care.” And, the researchers noted, “Medicare Advantage enrollees are more likely than those in traditional Medicare to have a treatment plan, to have someone who reviews their prescriptions, and to have a regular doctor or place of care.”
In that study, a larger share of Medicare Advantage enrollees said they had a health care professional they could easily contact between doctor visits.
Overall, more than 90% of Medicare Advantage enrollees were satisfied with the quality of their care, about the same as with Traditional Medicare.
The second report, a 2022 KFF review of 62 studies, said it “found few differences between Medicare Advantage and traditional Medicare.”
Here, people reported similar rates of satisfaction with their care and care coordination in both. Medicare Advantage outperformed Original Medicare for use of preventive services such as annual wellness visits, routine checkups, screenings and flu vaccines. It also showed lower hospital readmission rates.
Also, Medicare Advantage enrollees with diabetes were more likely than Original Medicare beneficiaries with the disease to be prescribed guideline-recommended therapy and perform better on diabetic eye exam screenings. (There were no differences between the two types of Medicare for diabetic blood sugar control, though.)
Cons of Medicare Advantage plans
Limited doctor and hospital networks
Just how limited and what that will mean for your care depends on the Medicare Advantage plan. Each plan has its own network of doctors and hospitals, and the network members change annually.
It may be especially hard to find a psychiatrist in a Medicare Advantage plan you’re considering. A recent Health Affairs study found that about half of counties the researchers reviewed didn’t have a single Medicare Advantage-participating psychiatrist.
Also, if you travel or have a second home in another part of the country and need to see a doctor, you’ll pay extra for that—assuming the plan lets you go out of network and that you can find a physician who’ll take you.
The most popular type of plan is a Medicare Advantage HMO (Health Maintenance Organization. You’ll need to see network providers for routine medical care. Prior authorization is generally required to see a specialist—more on this potential problem momentarily.
Another type is a PPO (Preferred Provider Organization), which lets you go to physicians and hospitals that aren’t in its network. You’re more likely to owe a plan premium than with an HMO and you’ll pay extra for out-of-network providers. But you won’t need a referral to see a specialist.
PPOs typically have higher cost-sharing and out-of-pocket maximums than HMOs.
In his book, Get What’s Yours for Medicare, author Philip Moeller urges people shopping for a Medicare Advantage plans to check with the ones they’re considering to see what their options would be if they needed a complex surgical procedure or faced an extended hospital stay.
Prior authorization runarounds
Medicare Advantage plans requiring prior authorization to see a specialist call this practice a “utilization management tool.” But people in those plans sometimes use expletives for this mandate, because prior authorization can delay or deny them care.
When describing prior authorization rules of Medicare Advantage plans, U.S. Health and Human Services Inspector General reports found “widespread and persistent problems related to denials of care and payment.” In 2021, 2 million Medicare Advantage prior authorization determinations were denied, according to KFF.
The Biden administration has released stricter prior authorization rules to assist Medicare Advantage beneficiaries, taking effect in 2024. A few states are cracking down on prior authorization requirements, too, and some health insurers are eliminating them for so-called “gold-card” doctors and hospitals.
Delays in seeing doctors, just like Traditional Medicare
The Commonwealth Fund study noted that Medicare Advantage and Traditional Medicare beneficiaries reported waiting more than a month for physician office appointments and three weeks for hospital outpatient visits.
A lower likelihood of receiving topflight care
The 2022 KFF study said “traditional Medicare” outperformed Medicare Advantage in receiving care in the highest-rated hospitals for cancer care or in the highest-quality skilled nursing facilities and home health agencies.
A potential problem if you have employer or union health coverage
Sometimes, signing up for a Medicare Advantage plan can require you to give up coverage from an employer or union. In that case, you might also lose coverage for your spouse and dependents and become unable to get the coverage back.
A snag switching between Traditional Medicare and Medicare Advantage
When you go from Traditional Medicare to a Part C plan, you lose the ability to buy a Medigap plan. Worse, if you leave Medicare Advantage for Original Medicare and then try to buy a Medigap policy, in most states you could be turned down for it due to a pre-existing condition.
How to get more information about Medicare Advantage plans
You can do further research Medicare Advantage plans at the Medicare.gov site or by calling Medicare’s toll-free number (1-800-MEDICARE)
The Medicare site is where you’ll find the Medicare Plan Finder, which lets you compare plan coverage and costs and see Medicare’s star rating system, measuring how well the plans rate for quality of care and customer service.
State Health Insurance Assistance Programs, or SHIPs, let you speak to knowledgeable Medicare experts who can answer questions about Medicare Advantage plans.
You could also hire a Medicare Advantage agent or broker to shop for a plan. But try to get referrals from your doctor and from friends before working with one to help ensure you’ll be using a reputable pro. You might also look at the National Council on Aging’s Medicare Standards of Excellence list to find agents and brokers working in your best interest.
This story was originally featured on Fortune.com
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