Are Medicare Advantage Plans Worth It?
More than 1 in 3 older people–or about 43 million Americans–enroll in Medicare Advantage, the private insurance alternative to traditional Medicare. Most people sign up because they’re satisfied with the extra benefits and don’t mind paying a monthly fee to access services that are not covered by traditional Medicare.
So, are Medicare Advantage plans worth it? You might be surprised to learn that flexibility is Medicare Advantage’s biggest asset and that this program can make sense even for people who expect to stay healthy. Here’s how you can decide if a Medicare Advantage Plan is worth it.
How is Medicare Advantage Different?
Medicare Advantage plans are designed to cover the same services as Medicare Parts A & B, including prescription drug coverage and physician coverage, in addition to hearing, vision, and dental care.
However, Medicare Advantage Plans typically have higher monthly premiums than traditional Medicare. And Part D drug plans, which are offered by private insurers, usually have a gap in coverage known as the “donut hole,” where you must pay more out of pocket for medication than traditional Medicare. However, on the plus side, these plans often offer extra benefits, making it worth the money you spend on it.
How Does Medicare Advantage Manage Costs?
Medicare Advantage plans are sold by private insurance companies that are approved by Medicare to provide the health benefits and services that you need as a Medicare beneficiary. Keep in mind that Medicare Advantage plans are typically regional. If you move out of the area or travel to other cities or states, you may no longer be covered.
With this type of plan, you give up your right to choose your own doctor and stick with the one or three (depending on the plan) that are in-network for your plan. For some people, this is a great option and a relief because they don’t have to search for doctors anymore. Others find it restrictive.
However, the advantage of Medicare Advantage Plans is that it typically costs a lot less money than regular Medicare plans. But, if you need to access a lot of medical care, it may cost you more money. Medigap plans work the other way around – you will have higher upfront costs but most of your expenses are covered when you need medical care.