13 things to know about Medicare Advantage Plans

Medicare’s Fall Open Enrollment will take place between Oct. 15 and Dec. 7 this year, during which Americans enrolled in Medicare programs can change their coverage from traditional Medicare to a Medicare Advantage Plan (or vice versa), transfer from one Medicare Advantage Plan to a different one, join a Medicare drug plan, and more.

Whether you’ve had your current coverage for many years or have just begun receiving benefits, you may wonder if you should consider making a change (which will take effect on Jan. 1, 2023).

Of course, comparing the government’s traditional plan with the offerings of numerous private providers can be complex and confusing. To help you evaluate the options, we’ve asked K. Katrice Daniels, a licensed insurance broker and founder of Insure Black America, and Emily Gang, CEO of The Medicare Coach, to share their expertise about what you need to know about Medicare Advantage Plans.

1. Protect your health care rights and retirement savings by reviewing the basic ABCs (and even the Ds and Gs) of Medicare.

While there are Special Needs Plans for individuals with chronic conditions, those who live in inpatient facilities or those who require dual enrollment in Medicaid and Medicare, most Americans enter traditional Medicare plans:

• Part A/Hospitalization: Inpatient care in hospitals, skilled nursing facility care, hospice care and home health care
• Part B/Outpatient Services: Doctor and other health care provider visits, outpatient care, home health care, durable medical equipment, and preventive services (such as screenings, vaccines and wellness visits)
• Part D/Drugs: Prescription medications (including many recommended vaccines)

Like many insurance plans for younger individuals, traditional Medicare plans typically pay 80% of claims with the remaining 20% paid by the Medicare recipient. 

If you and/or your spouse have worked for 40 quarters (10 years) and have made FICA contributions through paycheck deductions, you have pre-paid your Part A premiums. If not, your monthly Part A payments are likely to range from $274 to $499 monthly. In addition, all Americans enrolled in Medicare pay a monthly Part B premium of approximately $170, and everyone enrolled in Part D pays an additional monthly premium of $43.

To help lower the out-of-pocket expenses for the remaining 20% of care costs, some Americans buy supplemental insurance known as Medigap (or Part G) from private companies.

Alternatively, a Medicare Advantage Plan – sometimes called Medicare Part C – replaces Medicare Part B and D and eliminates the need for Part G. Essentially, the Medicare-approved plans offered by United Healthcare, Humana and other private companies roll the outpatient and medication services into a single program. 

Advantage Plans may offer no or low premiums, lower out-of-pocket costs, extra benefits such as vision, hearing and dental services, and even gym memberships or other perks. These programs usually require members exclusively use doctors in their network and shoulder higher copays and deductibles for services. That’s why it’s important to understand the pros and cons before switching plans. 

2. Whether you join a Medicare Advantage Plan or traditional Medicare, your rights and protections are the same.

Advantage Plans are offered only by Medicare-approved private companies, so they must adhere to Medicare’s regulations. Yet, each plan functions differently, so it’s important to understand the summary of benefits and compare those benefits to competitors in your market.

3. Everybody enrolled in traditional Medicare or an Advantage Plan pays Part B premiums.

The amount can change every year and depends upon your income. While Americans who have higher incomes can pay more, most seniors pay a flat, monthly fee of $170.10. 

Emily Gang

Medicare Coach

“If you’re on Social Security,” Gang said, “you may pay less than the standard Part B amount based on the cost-of-living adjustment.”

Daniels explained further: “If you qualify for a level of Medicaid, your state may cover Part B for you.” 

4. If you enroll in an Advantage Plan, there’s no need for Medigap insurance or Part D coverage. 

You cannot use Medigap to pay an Advantage Plan’s premiums, copays or deductibles, so if you decide to join an Advantage Plan, you can cancel your Medigap policy. 

If you’re concerned about meeting your copays and other financial obligations, you can investigate assistance through your state’s Medicaid.

In addition, individuals who enroll in Advantage Plans are ineligible for Part D/Drug coverage. While many Advantage Plans include prescription medications, make sure you confirm that coverage. 

Even though drug coverage is technically optional, Gang said, “If recipients do not have drug coverage that is as good as what Medicare provides, they can be subject to financial penalties for late enrollment.” 

5. While their perks have changed, Advantage Plans’ benefits haven’t changed recently.

In recent years, there have been no substantial changes in Advantage Plans. However, some companies added new perks, ranging from Fitbits and meal services to gift cards and even funds that can be applied toward Part B premiums.

6. Although some Advantage Plans offer $0 premiums, you still pay Part B premiums and other care-related expenses.

Many Advantage Plans require you to pay a monthly fee in addition to your Medicare Part B premium. Even if you enroll in an Advantage Plan that offers $0 premiums, you still pay Part B premium. To compensate for the lack of additional premiums, the plan’s copays, deductibles and other expenses may be higher than traditional Medicare. 

7. Before leaving traditional Medicare, understand the risk.

Advantage Plans tend to work well for healthy individuals. Traditional Medicare appeals to Americans with more health-related expenses. While it’s possible to switch back and forth, there are some caveats. 

For example: Maybe you joined an Advantage Plan for the perks and are now finding traditional Medicare has better coverage for your health issues. Although you can transfer into traditional Medicare during open enrollment, Gang suggests confirming your Medigap eligibility before signing the final paperwork. 

“In most states, if you want to get a Medigap plan after you’ve been out of Medicare for six months, the insurance companies are not required to accept you,” she explained. “They can ask about your health history, and they can deny you coverage due to preexisting or other conditions.”

Without a Medigap plan, you’ll be responsible for paying 20% of your medical bills. 

“If you’re paying for 20% of testing, chemo, office visits, etc., those costs can add up quickly,” she said, “and most people can’t afford that.” 

Even if transferring to traditional Medicare proves to be impractical, you’re likely to be eligible to join a different Advantage Plan that’s better suited to your needs.

8. Your loyalty to your doctors is likely to drive your choice of the plan.

K. Katrice Daniels

Licensed Health and Life Insurance Broker

“These days, most doctors take Medicare,” Daniels explained. “If your doctor does not take any of the Medicare Advantage plans, you’ll either need to change your doctor or stay on original Medicare.” 

Sometimes, that choice involves an entire network rather than just a primary care or other physician. 

For example, Kaiser Permanente only takes its own Medicare Advantage Plan. So, seniors who want to keep seeing their Kaiser-affiliated physician typically choose that plan.

Out-of-network physicians can result in additional costs, so think about not only which doctors you currently see but which you would choose if you were diagnosed with cancer, diabetes or another illness.  

9. Medication coverage is another major factor in determining the right plan.

After she and her clients have discussed physician preferences, Daniels next compares different plans’ coverage to her clients’ prescription list as well as frequently used over-the-counter products. 

With rare exception, Medicare Part D pays only for prescription drugs that are on its formulary list. Aspirin, allergy medication and other over-the-counter medications are not covered by Medicare. However, Daniels said some Advantage Plans not only cover these medicines but also vitamins and other supplements.

10. Where you live influences the best plan for you.

Your location dictates which plans are available in your area and state regulations with which they must comply. And not all plans are available in every state. 

“Finding a plan in New York, which has very much relaxed preexisting condition rules, requires a different strategy than a state like Texas, which has standardized rules,” Gang said. 

11. Your lifestyle and whether you travel impacts which plan is best for you.

Whether it’s by RV or private plane, seniors who travel nationwide generally prioritize coverage throughout the country over the benefits of a particular health care system.

“If they travel a lot, traditional Medicare may give them the best coverage without having to worry about out-of-network costs,” Daniels said. 

12. Before you make a final decision, be sure to get facts from an unbiased source.

“When clients come to me first,” Daniels says, “I can explain the difference in the plans correctly, so they’re not confused.”

Typically, your best source of unbiased information comes from websites, your trusted licensed insurance broker, or free workshops or webinars by national nonprofits such as the National Council on Aging and government websites such as medicare.gov.

13. Remember: The next enrollment period is never far away.

Even if you’re on traditional Medicare or an Advantage Plan, you can always change to a different plan during the next open enrollment.