What is Medicare Advantage? Everything You Should Know (2022 Updated)

— Last Updated May 27, 2022

What is Medicare Advantage? Everything You Should Know (2022 Updated)

In this article

— Last Updated May 27, 2022

Read Time
9 mins
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Reviewed by
Eric Berkman
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What is Medicare Advantage? Everything You Should Know (2022 Updated)

Stephanie Wilson

Director of Operations

Read Time

9 mins
Group-27.png

Reviewed by

Eric Berkman

In this article

medicare advantage

In the world of Medicare, and health insurance in general, there are an overwhelming number of options. One of the options you’ve probably heard a lot about recently is Medicare Advantage. There’s a good reason for that, too. It solves many of the original Medicare’s shortcomings, and it provides more options for policyholders. 

That doesn’t really answer your most burning question, though. 

What is Medicare Advantage?

Medicare Advantage: Overview

The Medicare Advantage program is designed to offer older Americans more options when it comes to their Medicare plans, as part of their healthcare planning.

The original Medicare plan simply split the provided health insurance into two sets of coverage: Medicare A and Medicare B. These plans are still around, and they’re part of Medicare Advantage. 

However, while Medicare is run by the federal government, Medicare Advantage is a separate program, run by private providers, and this program must be held to Medicare’s standards while also offering a larger variety of premium prices, services, general coverage, and more. You should know what to choose between medicare vs medicaid.

In short, it’s a far more flexible insurance plan that helps individuals find coverage based on their needs instead of taking a one-size-fits-all option, which is how Medicare typically works. 

What is Medicare Advantage? 

 

medicare advantage

 

Medicare Advantage is a newer approach to the Medicare system. Like Medicare, it is for individuals age 65 and older, and all Medicare Advantage plans exhibit the same general traits as either Medicare part A or part B. 

However, thanks to the involvement of private suppliers, Medicare Advantage plans can offer a much more impressive variety of coverage. Depending on the plan and the provider, policyholders may enjoy coverage for gym memberships, elective procedures that otherwise weren’t covered, low or completely free premium payments, and a multitude of other possibilities. A good thing to know is why is medicare supplement insurance important.

Since this is an extension of Medicare, the Medicare system pays into your Medicare Advantage plan to help cover, or completely cover in some cases, the costs associated with your coverage.  So you’re able to fund your Medicare Advantage plan from Medicare, which you as a tax paying citizen have paid into while you’ve been working. 

It is worth noting that this doesn’t mean Medicare Advantage is for everyone. Like normal Medicare, many providers require policyholders to seek care within the approved network.  Obtaining specialist care from outside of the network often requires an approved referral, and certain plans may not cover necessary costs that would be covered by a Medigap supplemental insurance plan; which is incompatible with Medicare Advantage. 

Who is Medicare Advantage For?

First and foremost, Medicare Advantage is only for individuals age 65 or older. This is in line with traditional Medicare’s age requirements. However, not every 65-year-old looking for health coverage will benefit from it. 

medicare advantage

The exact pros and cons of Medicare Advantage will be outlined later for you to determine whether or not it’s a good choice for you, but in general, Medicare Advantage is most beneficial for those who can’t afford to get Medicare and a supplementary plan such as Medigap; as that option typically provides more coverage, but it also comes with a much higher price tag. 

Medicare Advantage Plans

In general, there are four main types of Medicare Advantage plans that you’ll be able to choose from. 

  • PPO
  • HMO
  • Private Fee-For-Service Plans
  • Special Needs Plans

The first two plan types on that list are the most common, while the second two are typically reserved for special cases. Beyond these four options, you may qualify for some more unique plans if your chosen provider offers them, but you are unlikely to deal with that outside of very specific circumstances. 

HMO plans are the most common and as “Health Management Organizations.” These are typically standard coverage plans that usually require you to use an in-network service provider for any care you receive. Although, some variants do allow you to seek service outside of the network with a few caveats. 

PPO plans are also known as “Preferred Provider Organizations”. These are plans that utilize doctors the insurance provider has negotiated set rates with. These reduced rates guarantee policyholders lower prices when using an in-network care provider. 

Private fee-for-service plans tend to offer more freedom of choice when it comes to care providers, but they also pay doctors for every service rendered. This can have undesirable effects that will be touched on later. 

Finally, special needs plans are specifically meant for individuals suffering from one or more certain illnesses. Rather than providing very general care, these plans focus on the areas of coverage that are most necessary to meet the policy holder’s needs. It is also called Medicare Part C in some instances; despite being a Medicare Advantage plan. 

What are Medicare Advantage Plans? 

Here are some in-depth facts you need to know about Medicare Advantage. 

Definition: 

A privately-provided insurance plan connected to Medicare parts A and B that may or may not come with extra features and more desirable prices. 

Understanding Medicare Advantage Plans:

Medicare Advantage plans aren’t as straightforward as traditional Medicare. With traditional Medicare, it’s easy to tell what is covered and what isn’t because all of the plans are provided by the Medicare system. 

Medicare Advantage is much more complicated. Yes, a Medicare Advantage plan is required to cover the core features of traditional Medicare, but since private insurers are in control of issuing the policies, all other aspects are handled by the insurer. 

This gives you a lot of options, but it also means that you may get overwhelmed or end up with a plan that isn’t quite what you need. That’s why it’s recommended to seek the help of a professional insurance agent before committing to any sort of Medicare Advantage plan. They can walk you through the ins and outs of each plan, weigh the pros and cons against your needs, and generally help you find the most optimal plan possible. 

It is not recommended to attempt to understand a plan by yourself; as there are often less obvious pros and cons related to such a diverse group of plans. 

Key Advantages of Medicare Advantage Plans: 

In general, there are several key advantages Medicare Advantage has over traditional Medicare, Medigap, and other insurance policies. Policy-specific advantages are so varied that you will need the help of a professional insurance agent to help you understand which ones will come with your plan. 

Here are the general benefits you can expect. 

Lower Premiums: 

By and large, Medicare Advantage plans have much lower premiums than the combined premiums of Medicare and Medigap, and they’re also extremely competitive with private insurance prices. In some instances, you may pay $0 in premiums for a Medicare Advantage plan. 

medicare advantage

 

Out of Pocket Caps:

If you frequently need to use your insurance to lower the cost of prescription meds or ongoing treatments, you’ll probably get a lot of use out of the mandatory out-of-pocket limits Medicare Advantage plans have. This means that once you spend a certain amount of your money within a year, your insurance provider takes the full financial burden for the remainder of the year. 

For example, perhaps your policy comes with a $10,000 out-of-pocket limit. If you suffer through multiple hospital visits in a month and reach that limit early in the year then for the rest of the year, your insurance has to pay the full price instead of what’s leftover after you pay a deductible. 

Emergency and Hospital Coverage Guaranteed: 

When you have a Medicare Advantage plan, your emergency care is automatically covered. If you fall, get into an accident, or experience some other sort of emergency, you don’t need to worry about approvals, references, or anything besides potential deductible payments or copays. 

Expenses: 

While your costs may vary from plan to plan, you will generally have a few expenses you’ll have to pay regardless of plan. 

Premiums

This is the monthly price you pay for coverage. With most Medicare Advantage plans, your premiums will be fairly low. 

Deductibles

If you receive care or treatment, you will likely have to pay a deductible. This is a portion of the overall bill that you must pay before your insurance provider covers the rest. Be warned: Medicare Advantage plans often have high deductibles. This means that you will likely have to pay a larger percentage of your bill than with other plans unless you hit your annual out-of-pocket limit. 

Drug Prices

Medicare Advantage plans don’t provide coverage for your prescription drug costs automatically. At least, most of them don’t. So, you will have to pay for your medications in a lot of situations. Luckily, there is a Medicare Advantage Drug Coverage plan that will provide you with coverage, and you will only have to pay a small copay. 

What Do Medicare Advantage Plans Pay For? 

Medicare Advantage plans can pay for quite a bit, but they make a lot of compromises, too. If you don’t understand these compromises, you can easily find yourself paying out-of-pocket for treatment you’d think was covered by your insurance.  So, it’s important to talk to an insurance agent who specializes in Medicare advantage plans to help you understand what will and will not be covered. 

Hospital and Emergency Bills

Just like an original Medicare plan, Medicare Advantage plans will pay your hospital and emergency room bills. You may still have to pay a deductible depending on your exact plan, but at least some of the final bills will be paid by insurance. 

Dental and Vision

Many Medicare Advantage plans do include dental and vision coverage. However, some providers opt out of this coverage so check with your insurer to make sure this common coverage is provided if you decide to get a Medicare Advantage plan.  

Gym Memberships

Many Medicare Advantage plans also pay for gym memberships. You will likely have to choose a gym that is included in your network, but the free or greatly reduced gym membership is a perk worth having.

Medications (When Stated)

This is not covered by every plan. So, check your insurance policy to make sure your meds are covered. If they’re not, you can ask a professional insurance consultant to help you find a plan that does. 

In some cases, even with the Medicare Advantage Drug Coverage plan, you will have to pay a small copay for each medication you receive. This is still far less than simply paying out-of-pocket for them. 

Notable Uncovered Expenses

Not everything is covered. Most elective surgeries, x-rays, CAT scans, MRIs, non-crucial surgeries, and other expensive procedures are not automatically covered. However, many of them can be paid for in full if an in-network doctor recommends them. 

Are Medicare Advantage Plans Worth It? 

In short, Medicare Advantage plans are worth it under specific circumstances. 

On the positive side, premiums are almost always far lower than other senior health care coverage options, and sometimes they’re completely free. You get guaranteed coverage for everything covered by original Medicare, and most insurers will add coverage for non-standard items such as gym memberships, vision and dental treatments, and many other potential features. 

However, Medicare Advantage plans also have several drawbacks. First and foremost, deductibles tend to be high. This means you’ll pay more out-of-pocket costs until you reach your mandatory limit. You also tend to receive less coverage than if you had paid more for original Medicare with a Medigap supplemental plan. Also, you will usually be forced to seek care from in-network care providers, and a lot of the time, you can expect to see a nurse practitioner instead of a fully-qualified doctor. In some cases, that may not be a worthy compromise. Finally, Medicare Advantage is not compatible with Medigap. So that means, you cannot get a Medicare Supplement policy if you have a Medicare Advantage policy. 

Overall, Medicare Advantage plans are worth it for those who can’t afford to purchase a Medigap plan alongside their normal Medicare coverage. They are also ideal for those who don’t need the most robust coverage possible. 

How to Find the Best Medicare Advantage Plans? 

Finding the best Medicare Advantage plan for your needs is crucial. However, doing so can be difficult. You certainly don’t want to go with whatever you see first, and you should expect to shop around a bit. 

There are online tools that help you compare plans yourself, and of course, there are plenty of reviews if you like to perform a lot of hands-on research. 

However, those methods are not exactly the most reliable. Medicare Advantage plans can be complicated, and the small details may make an otherwise ideal plan unsuitable for your unique needs. Instead, it’s best to speak to a professional insurance consultant such as Policy Solver. 

Where Can I Find Out More and Get Advice on Medicare Advantage? 

The best way to weigh your options and choose the right Medicare Advantage plan, or another insurance plan, is to contact Policy Solver. Policy Solver has insurance experts on standby, and they’re ready to guide you through the many insurance options at your disposal. They can take your unique financial and medical needs into account, find plans that will work for you, and guide you to a plan you’ll be satisfied with; without all the guesswork and potential for error. 

It’s best to contact Policy Solver first because as you now know, Medicare Advantage isn’t for everyone. Even when it is suitable for you, the multitude of plans can be difficult to sift through. You’ll have to consider premiums, deductibles, types of coverage, extra features, and so much more that can easily cause you to spend more than you should or lack the necessary coverage for your situation. Don’t do it on your own; contact Policy Solver today, and find the right insurance policy for you!

Policy Solver’s Services

Today, you can find multiple insurance consultants on the internet. However, choosing the right advisor is another difficult task. Policy solver has knowledgeable, licensed agents, and is here to help you navigate through your disability insurance journey. We are a team of professional insurance policy brokers and we can save you time and money while finding the right policy for your specific needs.

Our experienced advisors will ask you a few questions to understand your unique situation and will come up with a comprehensive analysis of different insurance plans so they will be able to recommend the best policy at the best price for you.

So, what are you waiting for? Contact us or schedule a free consultation, and we will get back to you soon!

 

Sources: 

Official Medicare website, 2021, https://www.medicare.gov/sign-up-change-plans/types-of-medicare-health-plans/private-fee-for-service-pffs-plans

Official Medicare website, 2021, https://www.medicare.gov/sign-up-change-plans/types-of-medicare-health-plans/things-to-know-about-medicare-advantage-plans

Sourced from Medicare.com, 2021, Pros and Cons of Switching to a Medicare Advantage Plan, https://medicare.com/medicare-advantage/the-pros-and-cons-of-switching-to-medicare-advantage/#:~:text=Another%20advantage%20of%20a%20Medicare%20Advantage%20plan%20is,Medicare%2C%20you%20may%20be%20curious%20about%20Medicare%20Advantage.

December 8, 2021

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