If you’re eligible for Medicare or soon will be, you may have heard of, and wondered about, Medicare Advantage plans.
What is a Medicare Advantage plan? Can you get one? Perhaps most importantly, should you – why might you want one of these plans?
We’ll try to answer all of these questions today and provide you with some peace of mind and helpful information about what your options are.
What is Medicare Advantage?
Medicare is a large and complex program, and it’s a good idea to read up on each of the various parts. For our purposes, here’s a very concise summary of the first two parts from the official Medicare website:
Medicare Part A is hospital insurance. It generally covers inpatient care in a hospital or skilled nursing facility, as well as hospice and home health care.
Medicare Part B is better described as medical insurance. It covers a variety of medical health and mental health services.
Together, Medicare Parts A & B are the two main parts of Original Medicare. There is also a Part D which covers prescription drugs.
Some people, however, choose not to get their Medicare Parts A & B benefits through Original Medicare, and instead opt to receive them through Medicare Part C… also known as Medicare Advantage.
Unlike Original Medicare, these plans are offered by private companies that contract with Medicare. The key stipulation that governs all of these plans is that they absolutely must provide at a minimum the same level of coverage provided by Original Medicare in Parts A & B.
So, if you don’t want to go the classic route, you can get a Part C plan that will effectively serve you as a combined A & B, but it will be provided by a private insurer contracting with Medicare as opposed to the original program itself.
You’re probably wondering, though, why you would want to do that. Are there any actual advantages, or are you better off sticking with the original program?
Let’s try to answer that question by considering a few important points.
You May Save Money
Since Medicare is not free and in fact has deductibles, copays, and coinsurance, you may want to look into ways to save money if you possibly can.
With a Medicare Advantage plan, you will still pay your Medicare Part B premium, and you may pay an additional premium – although some plans have additional premiums priced at zero.
Where you may start to see a benefit is in the form of better cost sharing. It could be the difference between a small copayment – say, $10.00 – for a primary care physician’s visit, and coinsurance of 20% for that same visit.
Another aspect of this is that unlike Original Medicare plans, Medicare Advantage plans limit your maximum out-of-pocket expense. Once you hit that maximum for the year, anything additional over that limit is no cost to you.
To be clear, this is the difference between potentially limitless expenses – at least in theory – and having a cap on how much you may have to spend in a year.
The ability to save money may be a very compelling reason to think about getting one of these plans as opposed to the originals.