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Are Medicare Advantage Plans Worth It?

Susan is a registered nurse (RN). She has more than 16 years of experience working in the healthcare profession in a variety of roles.

As individuals approach age 65 and begin looking at the different Medicare options, they can feel like they are in a tangle trying to understand the many plans. Medicare Advantage is one way to get your needs met.

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Medicare Advantage Plans

Medicare Advantage is one way to get your Part A and B Medicare coverage. However, this program is sometimes called Part C or MA plan. Most Advantage programs also include Part D, which is your drug or prescription coverage.

This program is operated through private insurance companies that must follow Medicare guidelines or a strict set of rules. These plans require you to use health providers that participate in the plan's network, and you could be charged more if you do not choose someone who participates in the program.

These plans also limit what you pay out-of-pocket; once you reach that limit, your coverage is wholly covered.

There are many advantages to the Medicare Advantage plan, though it is not the best solution for everyone.

Parts of Medicare Explained - A,B,C,D

  • Part A is your Hospital Cover or Inpatient Care, skilled nursing care, Hospice, and Home Health Coverage.
  • Part B is your services from doctors, and other health care providers, outpatient care, home health care, durable medical equipment (DME), and preventative screening.
  • Part C is Medicare Advantage and combines Part A, B, and sometimes D.
  • Part D is your drug coverage.

What is the Difference between Original Medicare and Medicare Advantage?

One of the key differences is the way you get your Medicare. In original Medicare, Part A and B are included. You can choose to purchase Part D. Additional coverage can be purchased, called Medigap, which can sometimes cover services or items that Medicare does not.

Medicare Advantage or Part C, or MA Plan, and it is considered all-in-one insurance. Parts A, B, and D are bundled into one insurance plan. This plan can also include extra benefits like vision, dental, and hearing which original Medicare does not have.

There are differences in the way you pick your physician with each plan. If you have Original Medicare, you can use any doctor or hospital in the United States that takes Medicare. If you decide to participate in Medicare Advantage, you are part of a network. You will need to use a doctor that is in the Medicare Advantage network. If you need a referral, they will also have to participate in that network in most cases.

Different Types of Medicare Advantage

There are several different Medicare Advantage plans and only one Original Medicare. So, if you choose to have a Medicare Advantage plan, you will need to decide which one; the four basic plans are:

Health Maintenance Organization (HMO) Plans - with this type of plan, you will get your basic care from a primary care provider (PCP) that you pick from your plan's network. If you need a referral, your PCP will provide it to a specialist within the network.
Preferred Provider Organization (PPO) Plans – With this plan, you do not have to choose a PCP as in the HMO plan, but you do have to use PPO providers. You can choose any doctor but will pay less if they are a PPO provider.

Private Fee-for-Service (PFFS) Plans – This plan is a pay-for-service insurance company that is offered by a private insurance company. The company decides how much the service should cost, and you will only pay that amount for the service you use. A disadvantage to this plan is many providers do not accept this insurance and will not treat you; you will have to pay out of pocket for services

Special Needs Plans (SNPs) – This plan is specific to special needs. It generally is someone with End-Stage Renal Disease, Dementia, Heart Failure, or someone covered both by Medicare and Medicaid. Like the other Medicare Advantage Plans, you will want to ensure your doctor takes your insurance.

These are the four basic types of Medicare Advantage plans but there are others. To find out more about Medicare Advantage plans in your area, refer to Find a Medicare plan.

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Pros and Cons

Some of the pros are:

  • The initial cost of the plan is lower - Most costs are paid when you use health care services. This can be a benefit for a healthy individual.
  • Medicare Advantage covers many of the extra services - Original Medicare does not cover well-checks, dental, or vision. Medicare Advantage does. Some of the policies even cover fitness programs like Silver Sneakers.
  • Medicare Advantage plans have a yearly limit - Once you reach that limit, you pay nothing for covered services.

Some of the Cons

  • Hospitalizations typically cost more.
  • You can pay multiple copays for the same issue - You may have to pay a copay for appointments, lab and other services.
  • They make you get a referral - With Medicare, you can choose any physician that takes Medicare. With the Advantage plan, you are required to get a referral.

Hospitals Stays Can Add Up

A 2020 study from Keiser Family Foundation on COVID hospitalizations found that the Medicare Advantage enrollees would pay less for an inpatient stay of 3 days or less. Though as days increased, the out-of-pocket expenses added up. In a stay of 5 days or more, at least half of the Medicare Advantage enrollees paid more.

Remember, you must use the card from your Medicare Advantage Plan to get your Medicare-covered services. Keep your red, white, and blue Medicare card in a safe place because you may need to use your Medicare card for some services. Also, you’ll need it if you ever switch back to Original Medicare. Below are the most common types of Medicare Advantage Plans. 

— Medicare.gov

Silver Sneakers Program

Need to get moving? Exercise is essential, and the Advantage programs recognize this significant health incentive. A Medicare Advantage perk on many policies is the Silver Sneakers program.

The Silver Sneakers program gives you free access to many health and fitness programs.

This program includes:

  • The use of participating gyms, including all equipment and pools.
  • Fitness classes that are designed for 65+ individuals that want to stay in shape.
  • A supportive community of staff, other older individuals, and online resources.
  • Access to online workout videos, nutrition, and other resources.

Studies have shown that older individuals regularly participating in the Silver Sneakers had improved health. So check if this is a covered part of your Medicare Advantage.

Sliver Sneakers

One study followed SilverSneakers participants for 2 years. By year 2, it was found that participants had lower total healthcare costs as well as smaller increases in healthcare costs compared to nonparticipants.

— Healthline

Choosing a Medicare plan depends on your situation. It is impossible to make a blanket statement about whether the Medicare Advantage plan will be worth it for you. So do your research and decide which plan will be best.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2022 Susan Sears

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