Why You Should Consider Paying for Medicare Advantage Plans

In 2019, 34% of Medicare beneficiaries were enrolled in a Medicare Advantage plan according to the Kaiser Family Foundation (KFF). That’s equivalent to 22 million people. These plans are growing in popularity because they are more cost-effective than Original Medicare in most cases. Here are some reasons you should consider Medicare Advantage.

Medicare Advantage plans have a maximum out of pocket limit

With Original Medicare (Part A and Part B only), there is no cap on out-of-pocket spending for approved services. For example, after you meet the Part B deductible, you’re responsible for 20% of your Part B costs even if they amount to tens of thousands of dollars.

However, if you are enrolled in a Medicare Advantage plan, you are protected by a maximum out-of-pocket (MOOP). The MOOP limits your responsibility for approved services to a specific dollar amount. MOOPs vary by Medicare Advantage plan. However, in 2021, a Medicare Advantage plan’s MOOP can’t be any higher than $7,550; most plans set their limit below the government max.

Some Medicare Advantage plans have out-of-network benefits. If you have a plan with out-of-network benefits, you’ll have a separate MOOP for those services. For example, your MOOP for in-network services may be $6,700, while your MOOP for out-pf-network services may be $10,000.

Medicare Advantage plans have low premiums

One of the most attractive details of Medicare Advantage plans is their low monthly premium, which usually includes Part D. Many Medicare Advantage plans, in fact, have no monthly premium at all. According to KFF, in 2019, over half of the Medicare Advantage beneficiaries had a $0 premium plan. You are essentially getting a Part D plan for free when you choose a $0 premium Medicare Advantage plan.

Some plans do have premiums as high as $100 a month or more. In 2019, the average Medicare Advantage plan premium was $21 according to the Centers for Medicare and Medicaid Services. You should note, when enrolled in a Medicare Advantage plan, you must still pay your Part B premium.

When enrolled in a Medicare Advantage plan, your insurance company determines your cost sharing. Copays are often lower than Original Medicare’s coinsurance amounts.

Medicare Advantage plans generally have extra benefits not covered by Original Medicare

Original Medicare does not cover routine dental, vision, and hearing benefits. It also doesn’t cover long term care services. Medicare Advantage plans, however, are allowed to cover these services. Most cover routine vision and dental and some have provisions for certain long-term care services.

You could even get extra perks such as a SilverSneakers fitness membership. According to the Kaiser Family Foundation, 67% of Medicare Advantage plans included dental benefits, 72% of them had fitness memberships, and 78% included vision benefits.

Note that Medicare Advantage plans can update their plan benefits annually, and these ancillary benefits can be dropped at any time. That’s one reason why you should use the Annual Election Period (AEP) to shop your Medicare Advantage plan each year.

The Annual Election Period

The AEP occurs every year during the fall and is a time for Medicare beneficiaries to enroll in, change, or drop Medicare Advantage and Part D plans. You should take advantage of this period every year as your Medicare Advantage plan can change its premiums, coverage, copays, and drug benefits each year.

Medicare Advantage plans are a great alternative to Original Medicare, but some people find Original Medicare with a Medigap plan the better option for them. To make sure you’re getting the best coverage for you, compare Medicare Advantage and Medigap plans before you enroll in Medicare. That way you’ll be able to make the choice that suits your unique needs.