Medicare Advantage plans, also known as Medicare Part C, are sold by private insurance. Part C combines original Medicare coverage and provides additional benefits. While some Part C plans offer better care, plan flexibility, and long-term savings, others can lead to additional costs and fewer provider options.
Even though Medicare Advantage plans are a substitute for original Medicare, it comes with underlying advantages and disadvantages. So, without further ado, let’s dive in and uncover these pros and cons. But before that, you need to be aware of the different types of Medicare Advantage Plans.
Types of Medicare Advantage Plans
- Preferred Provider Organization (PPO). This kind of plan provides flexibility for individuals who need coverage services from both in- and out-of-network providers. With this kind of plan, you can visit any provider of your choice.
- Health Maintenance Organization (HMO). These plans are built around in-network care. What this means is that you are provided with a list of providers to choose from. In the event you opt for a provider out-of-network, be sure to pay more.
- Provider Fee-for-Services (PFFS). PFFS covers services provided by original Medicare (Part A and B). PFFS gives you the chance to select your specialist.
- Medical Savings Account (MSA). These are plans paired with high-deductible health plans.
- Special Needs Plan (SNPs). This plan covers your hospital stays, doctor’s visits, and medications, plus other services you may require in the management of your health. The advantage of this plan is that it provides extra services depending on your unique healthcare needs.
Advantages of Medicare Advantage Plans
- Personalized Plan Structures
Part C plans provides different types of plans depending on one’s needs or personal situation. For instance, SNP Advantage plans can assist with medical costs, especially for those suffering from chronic health conditions.
In case you prefer provider freedom, PFFS or a PPO plan may just be what you need, and if you need extra services like vision, dental, or hearing, most Part C plans include them.
- Convenient Coverage Options
It’s without any doubt that Original Medicare only provides hospital and medical insurance coverage. This means that if you need extra services, you’ll be required to purchase Medicare Part D (prescription drug coverage). However, with Medicare Part C plans, all your coverage options are put together in a single convenient plan.
- Cost Saving Opportunities
Most Medicare Advantage plans have low to no deductibles. Additionally, most of them do not have premiums. You can learn more about Medicare Advantage plans here.
Another beauty of these plans is that they have set limits on the out-of-pocket costs you are required to pay annually.
Furthermore, research has shown that you can save money on medical equipment and lab services, simply by switching to the Medicare Part C plan.
- Coordinated Medical Care
Part C plans are well-known to include coordinated medical care. What this means is that your healthcare specialist actively gets in touch to synchronize your care between specialists and varying kinds of services. This is very important as it ensures that you have a healthcare team, thus, helping avoid unnecessary expenses.
In a certain study, researchers pointed out that coordinated care was linked with a positive medical staff experience and higher patient ratings.
Disadvantages of Medicare Advantage
Additional Costs for Coverage
Medicare Part A and B charge a deductible, premium, and coinsurance, plus any Medigap coverage costs. When it comes to Part C plan, it often combines these costs, however, you may notice extra fees. For instance, most Medicare Part C plans include specialist visits and deductibles.
State-Specific Coverage
Contrary to Original Medicare plans which are offered across the United States, Medicare Advantage is only provided in specific service areas. This means that if you transfer to a new service area, your contemporary plan may not be available.
Limited Service Providers
By choosing certain plan types, such as Health Maintenance Organization (HMO), you limit yourself to the number of service providers you can see. Moreover, you can incur higher fees if you opt for an out-of-network provider.
While other plans can give you more provider options, you may suffer from higher fees (like deductibles and copays) and premiums.
Referrals Required
Some Medicare Advantage plans require referrals for patients to seek care. Needing a referral can make a patient feel restricted in their healthcare options. For such reasons, patients need to review the plans available and select the ones that best fit their needs. This ensures that they receive the type of coverage suitable for their healthcare needs.
Annual Plan Alterations
Because Medicare Advantage plans are provided by private insurance, the Centers for Medicare and Medicaid allow insurers to adjust their plans annually. These plan alterations may not favor some patients.
High Maximum Out-of-Pocket Limits
The average out-of-pocket costs are set to increase due to the Centers for Medicare and Medicaid Services setting a new cost of between $6,700 to $7,500.
