What Is the 'Advantage' in a Medicare Advantage Plan?

Medicare Advantage plans get more and more popular each year. There are more insurance companies offering the plans and more providers willing to participate in them. Plus, there is no denying the attractiveness of the low premiums and extra benefits. 

If you have a TV, you’ve probably seen quite a few commercials boasting the advantages of Medicare Advantage. Now, it’s important to realize that every plan is different, and they aren’t all available in every county. You’re only allowed to enroll in ones that are offered in your residential zip code. Every Medicare beneficiary has access to at least one Medicare Advantage (Part C) plan, but those in urban areas have many options.

So, what’s so great about these plans? Let’s look at five advantages they have over other Medicare options.

Lower Premiums

We’re going to spend most of our time talking about the first two benefits as they are what drive many beneficiaries to choose Medicare Advantage over a Medicare Supplement plan. The first thing most people notice is the price tag.

According to the Kaiser Family Foundation, the average premium for a Part C plan that includes prescription drug coverage in 2020 was $25 per month. Many plans even offer premiums as low as $0 per month. To many beneficiaries, this sounds much more appealing than paying well over $100 a month for a popular Medicare Supplement like Plan G.

Extra Benefits

Considering our oral health, our vision, and our hearing are integral parts of our overall health, it’s surprising that there are no benefits for routine or preventive care in those three areas. Luckily, nearly all Medicare Advantage plans offer coverage for these services.

Every Medicare Advantage plan has its own set of bells and whistles. You may find plans that offer meal delivery following a hospitalization, transportation to and from medical appointments, gym memberships, and even over-the-counter stipends for things you find in drug stores.

Some plans also include a Part B giveback, which allows them to return a portion of your Part B premium to your Social Security benefits. For example, if your plan includes a $50 Part B giveback, it will reduce your Part B premium by $50 each month.

Maximum Out-of-Pocket Limits

While traditional Medicare (Parts A and B) offers great coverage, one thing many people don’t realize is that there is no out-of-pocket limit on your financial responsibility. For example, most people think that Medicare covers about 80% of your medical expenses. That is basically true. However, there is no limit on your 20%. If you have a major surgery that costs $100,000, you’ll be responsible for $20,000 - unless you have supplemental coverage like a Medicare Advantage plan.

Each plan sets its own maximum out-of-pocket (MOOP). Some are as low as $2,000, while others are more than $10,000. After you’ve met that amount, the plan will pay for 100% of covered services.

Guaranteed Issue

As long as you are enrolled in Medicare Part A and B, and you live within the plan’s service area, you are eligible to enroll in a Medicare Advantage plan, regardless of your current or past health conditions. (You must also apply during a specific enrollment period.)

The same is not true of Medicare Supplement plans. While everyone does have a period of guaranteed issue rights, it does not last forever. What that means is that after a certain point, an insurance company has the right to deny you a Medicare Supplement plan if you do not meet their health requirements.

Flexibility to Change Plans

Each year during the Annual Enrollment Period (AEP), you will have the choice to switch your Medicare Advantage plan. It’s a very important time of year and one that you should always plan for. If you haven’t liked your current plan or you find out that your current doctors won’t be participating in the plan next year, you have the ability to change plans.

In addition, new plans are always coming into the market. Even if your current plan is great, you might find a new plan that offers even better benefits or lower premiums. It’s always worth taking some time to review your plan during AEP.

It’s obvious that Medicare Advantage plans offer plenty of great benefits. However, be sure to fully understand how your plan works prior to enrolling. There are other out-of-pocket costs associated with these plans, and you may want to consider adding ancillary insurance policies like hospital indemnity plans or cancer policies to help with some of the larger expenses.

If you’d like to learn more about Medicare Advantage or your other Medicare options, speak with one of our local Medicare specialists. We’ll answer all your questions and help you find a plan that fits your needs.