Medicare Advantage, also known as Part C, is coverage by private insurance companies which replaces your Original Medicare Part A & B to become your primary insurance coverage. These plans are becoming increasingly popular due to their low monthly premium, but with that comes co-pays / coinsurance and network requirements for which providers you are able to use. Unlike Medicare Supplements, Medicare Advantage plans are not standardized so it is difficult to speak about them in general without narrowing it down to a specific plan.
Here are a list of pros and cons that we typically see with Medicare Advantage plans:
Pros of Medicare Advantage
Low Monthly Premium – Many areas of the country have plans offered as low as $0/month. Note that this is in addition to your Medicare Part B premium.
Maximum Out Of Pocket Limit – Original Medicare Part A & B have no limit on the maximum you can spend out of pocket which is very dangerous financially. Thankfully, Medicare Advantage plans do have a yearly limit on what you can pay out of pocket for your hospital and medical coverage. These maximums average roughly $6,000, after which the plan will cover the rest. Note that the monthly premium and prescription drug co-pays do not count towards this maximum.
Part D – Prescription Drug Plan included – Most will include a Part D plan at no extra cost.
Additional Benefits – Many plans include additional benefits beyond what Medicare offers such as gym membership, dental and vision coverage, and more.
Cons of Medicare Advantage
Co-Pays – Medicare Advantage plans have set co-pays for your services as you use them, think of it like a menu where you pay $x amount every time you go to the doctor and higher amounts per day in the hospital.
Networks – Similar to employer coverage, Medicare Advantage plans want you to stay within their network of doctors and hospitals. Going out of network will result in your paying a higher co-pay or 100% of the cost, depending on which plan you choose.
Catastrophic Coverage – Medicare Advantage plans limit your maximum out of pocket around $6,000 per year, but that still amounts to a large sum of money that many people simply don’t have budgeted for their healthcare. It is especially expensive when someone gets sick towards the end of the calendar year because their maximum out of pocket limit will reset on January 1.
Who is a Medicare Advantage plan best for?
Medicare Advantage plans are a great fit for people who are healthy, don’t travel much, and can’t afford to spend $100+/month on a Medicare Supplement plan. Many people love the added benefits like Silver Sneakers and the simplicity of having their drug plan built in.
Wondering if Medicare Advantage would be a good fit for you? Call us and let us help you compare all the Medicare Advantage plans in your area. In many states there are over 20 different plans, so its crucial to work with someone who can show you all of your options.