Health insurance is a must, especially if you have loved ones who depend on you. If you don’t want to incur medical debt, it’s best to purchase a health insurance plan right away.
There are many options available in the market, and one of them is Medicare Advantage. If you have health insurance, you’ve probably heard a thing or two about Medicare Advantage Plans.
Today, we will be breaking down what Medicare Advantage plans are and why they’re bad for you. If you’re 65 or older and plan to buy Medicare Advantage, continue reading to know what we think about these Medicare Advantage plans.
What is Medicare Advantage?
Medicare Advantage is a type of Medicare health insurance offered by private insurance providers. Also known as Part C plans, Medicare Advantage plans are considered one of Original Medicare’s alternatives.
Additionally, some Medicare Advantage plans in the market cover medical expenses that the Medicare program doesn’t pay for. These include vision, dental, and heating expenses. Moreover, the premiums of Medicare Advantage plans are paid for by Medicare.
Generally, MA plans have the same Part A hospital and Part B medical coverages included in the Original Medicare. The main difference is that MA plans don’t have hospice care coverage. Additionally, MA plans typically include the prescription drug coverage from Part D.
Lastly, what’s essential for you to know is that anyone who enrolls in an MA plan still has Medicare.
Types of Medicare Advantage Plans
Like other health insurance plans, MA plans also have different types. Below are the most common MA plans you can find in the market.
To give you an idea of these MA plans, we will be briefly explaining each of them.
- Health Maintenance Organization (HMO)
HMO plans require you to get medical care and services from healthcare providers in the plan’s network. However, services like emergency and out-of-area urgent care and out-of-area dialysis are excluded from this rule.
The most crucial detail you have to know is that you may be required to pay the full cost of getting healthcare outside the plan’s network. However, some HMO providers will allow you to get services from healthcare providers out of their network. This plan is referred to as an HMO with a point-of-service option or POS.
- Preferred Provider Organization (PPO) Plans
Preferred Provider Organization (PPO) Plans are another type of MA plan offered by private insurance agencies. Just like HMO plans, PPO plans also have a network of healthcare providers like doctors and hospitals.
The main difference is that PPO plans will allow you to go to providers outside the network.
- Private Fee-for-Service (PFFS) Plans
PFFS plans are unlike HMO and PPO plans that have healthcare provider networks. Instead, what PFFS plans do is determine how much they’ll pay healthcare providers. Moreover, PFFS plans also determine how much you must pay when you get healthcare.
In some cases, PFFS plans will allow you to get care from your preferred doctor or healthcare provider.
However, keep in mind that you’ll usually pay lower costs if you choose a healthcare provider in your plan’s network.
- Special Needs Plans (SNP)
Unlike other MA plans, SNPs limit who can purchase the plan. Generally, SNP plans are offered to only people with specific diseases or characteristics. Moreover, SNP plans customize their benefits, provider network, and drug formularies to best serve the group’s needs. If you want to know who is qualified to enroll in SNP plans, you may read this article.
Generally, SNP plans also require you to get healthcare services from providers in the network. However, some services are excluded from this rule, including emergency or urgent care and out-of-area dialysis.
The four types we’ve mentioned above are the most common MA plans you can find in the market.
However, there are also other types of MA plans that you can enroll in, including HMO Point of Service (HMO-POS) and Medicare Medical Savings Account (MSA) Plans.
Original Medicare vs. Medicare Advantage
As we’ve mentioned, Medicare Advantage plans are a type of Medicare health insurance. Given this, there are some differences that you have to know about.
Here is a table below to briefly explain what differences the Original Medicare and Medicare Advantage have.
| Overview | Original Medicare | Medicare Advantage |
| Coverage | Covers medical and hospital expenses only. | – Covers medical and hospital expenses- Also has coverage for dental, vision, hearing expenses, and prescription drugs |
| Cost | – Doesn’t limit what you pay for out-of-pocket costs- Only pays for several days in the hospital or nursing facility | – Provides an out-of-pocket maximum annually- Most plans pay 100% of the price for most services once you hit a specific amount |
| Travel | Excluding very rare instances, doesn’t cover care out of the country, even in an emergency | – May cover emergency care out of the country- Some plans cover emergency care with a specific lifetime maximum |
Aside from these fundamental differences, there are also other differences that you have to know about. These are:
- Coinsurance vs. Copay
With Original Medicare, you pay 20% of your medical expenses or 20% coinsurance. This applies to standard healthcare services like outpatient surgery or check-ups.
On the other hand, most MA plans use copays to pay a fixed amount.
- Network
Original Medicare plans allow you to go to any healthcare provider that accepts Medicare. With Medicare Advantage plans, you’re only allowed to go to healthcare providers in your plan’s network.
Pros and Cons of Medicare Advantage Plans
Now that you know some of the necessary details of Medicare Advantage plans, it’s time to talk about the pros and cons. This section will discuss the pros and cons of Medicare Advantage plans to help you decide if it’s right for you.
Pros of Medicare Advantage Plans
- Most plans have additional benefits.
Although most plans have the benefits of an Original Medicare plan, most MA plans have additional benefits. These include coverage for hearing, vision, and prescription drugs.
- Medicare Advantage may cost $0
Most MA plans require you to pay the Part B deductible. However, insurance providers typically offer a zero-premium policy. This means that you won’t have to pay for anything else to get the additional benefits we’ve mentioned above.
- MA plans have a maximum out-of-pocket amount.
Unlike Original Medicare plans, MA plans have a maximum out-of-pocket limit. If, in any case, you reach the amount specified by your plan, you don’t have to worry. This is because you won’t be required to pay for the healthcare services you get for the rest of the year.
Cons of Medicare Advantage Plans
- Medicare Advantage has a smaller healthcare provider network.
Unlike Original Medicare, MA plans don’t have nationwide coverage. MA plans also don’t allow you to just go to any healthcare provider of your choosing.
Generally, Medicare Advantage is more restricted and has regional networks, which means that out-of-network providers may not be covered.
- MA plans aren’t standardized.
Like other health insurance policies, MA plans aren’t standardized. With this, MA plans don’t have the same benefits and coverage. Some plans may have more coverage than others, making it challenging to find a plan at a reasonable rate.
- Medicare Advantage has the option to change its benefits every year.
With Medicare Advantage, there’s such a thing called the Annual Notice of Change. Typically, your provider sends it to you. We recommend that you review this notice as it contains the changes your plan has.
Are Medicare Advantage Plans Suited For You?
Now that you know the pros and cons of Medicare Advantage plans, it’s time to figure out if it’s the best health insurance for you. To do this, we recommend that you call your preferred insurance provider.
However, you can always do it yourself. If you’re planning to enroll in a Medicare Advantage plan, we suggest that you consider these factors:
- Costs: Consider the costs that you’ll be paying for throughout your plan. These include premiums, deductibles, and other charges.
- Coverage: Ask if the plan covers the services you need.
- Other coverages: If you need additional coverages, make sure you understand how it works with your plan.
- Healthcare providers: Make sure that your preferred healthcare provider is included in the network. Also, ask if you’re required to get referrals.
- Quality of care: The quality of healthcare varies, depending on the provider. With this, you have to make sure that you’re getting only the best from your plan.
- Travel: If you travel a lot, ask if your plan covers expenses outside of the country.
Why Medicare Advantage Plans Are Bad
One of the most common questions we hear is whether Medicare Advantage plans are bad or not. The problem usually comes up because of people asking for health insurance suggestions.
Over the years, many healthcare providers have shown a dislike for MA plans. Below are some of the most common reasons why people think Medicare Advantage Plans aren’t any good.
- It isn’t actually free.
Most times, people misunderstand how MA plans work, precisely how copayments and coinsurance work. Similar to Original Medicare, MA plans are a cost-sharing system. This means that you pay approximately 20% of your total medical expenses if you enroll in one.
- You’re more likely to get checked by a nurse practitioner than a doctor.
If your plan is an HMO or a PPO, this is true. HMO and PPO plans use capitation to pay healthcare providers. This means that there’s a flat fee for each plan holder.
With capitation, an HMO pays the healthcare provider a fixed amount of money. As a result, most providers use nurse practitioners to reduce expenses.
- Your plan’s details change every year.
As we’ve mentioned earlier, there’s such a thing as the Annual Notice of Change. This means that insurance providers can change your plan’s benefits and costs. This also allows insurance providers to change their healthcare provider networks.
- MA plans make you pay multiple copayments for the same thing.
Medicare Advantage plans are pay-as-you-go. You pay the premiums for your Medicare Part B and the additional premium for your MA plan if there’s any.
However, the majority of payments you make go to the healthcare services you avail of.
So, you pay a copayment if you go to a primary care doctor for an issue. You also pay a copayment if the doctor refers you to a specialist.
Not only that, but you also pay a copayment if you get lab or diagnostic tests.
Alternatives to Medicare Advantage Plans for Medicare Enrollees
Now that you know why MA plans are bad, you’re probably asking what alternatives you have. The truth is, there are lots of other options in the market that you can consider.
We recommend these alternatives if you don’t want to enroll in a Medicare Advantage plan.
- Original Medicare
- Original Medicare + Medigap: If you want additional coverage for medical fees
Final Thoughts
Medicare Advantage can be both good and bad, depending on your needs and situation. Like other health insurance plans, it has pros and cons that can either make an MA plan suited for you or not.
With this, it’s important to always shop around first before purchasing a health insurance plan. This ensures that you get the best plan for yourself.
If you liked this article, we recommend that you read these to know more about health insurance:
- How to Get Affordable Insurance Rates
- Reasons to Purchase Health Insurance
- Guide To Medical Insurance Deductible, Copays, and Coinsurance
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