I’ve talked to several clients recently and fielded this common question:
Are Medicare Advantage plans bad?
**(If you’re not familiar with Medicare Advantage plans, they are Medicare plans offered by the private sector. The federal Medicare program heavily subsidizes them, and they often “bundle” Parts A, B, and D of Medicare into one plan).**
I get where the question is coming from. Let me break down the three main reasons Medicare Advantage plans often get a bad rap:
1. Limited Provider Networks:
Many Advantage plans are Health Maintenance Organizations (HMO) where members opt to narrow down their network of doctors to one medical group. This can be too limited of access for many people.
2. Unexpected Costs:
Some folks say that while premiums might be low, out-of-pocket costs can sneak up on you. Out-of-pocket exposure on Advantage plans can range widely depending on where you live.
3. Plan Changes:
Plans can change their benefits every year and network contract extensions may not be renewed between the insurance companies and medical groups, which can be frustrating.
At the Martin and Associates office, we’ve always been big fans of the tried-and-true Original Medicare when adding on a Medicare Supplement – such as a plan G. We think it’s the “Cadillac of Healthcare.” Concerns over large medical bills can be largely eliminated with the traditional system.
However, the cost of adding on a Medicare Supplement just may not be in the budget, and premiums in most states go up annually as you age.
Advantage plans can have a more limited provider network: but if your doctors all line up in the same medical group, that may be okay with you!
Advantage plans can leave you on the hook for more out-of-pocket expenses, but they at least put a cap on them, which is so important.
While Advantage plans can change from year to year, you have the flexibility to switch plans during the annual enrollment period if you find a better fit.