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What You Need to Know About Medicare Advantage Plans


A few years ago I had replied to a Reddit post with the below information. Many readers found the information extremely helpful, so I decided to share it here as well.

When you become eligible for Medicare you have the option of enrolling in Part A and Part B. Part A is usually premium-free and covers your inpatient services. Part B comes with a monthly premium and covers your outpatient services. Each of them also comes with deductibles.

Original Medicare does not have copays. Part B only covers 80% of your outpatient services. That means without any supplemental coverage you’re responsible for the 20% coinsurance for any of your outpatient services under Part B as well as other out-of-pocket costs in the form of deductibles under both Part A and Part B. In addition, nor Part A or Part B cover prescription medications you pick up at the pharmacy.

This is where supplemental insurance options come into play. You can choose to enroll in either a Medigap plan to cover the 20% coinsurance as well as deductibles that come with Part A and Part B. Then you would enroll in a Part D policy to cover your prescription medications. Or, you can enroll in a Medicare Advantage plan, with or without prescription drug coverage.

Is Medicare Advantage a Ripoff?

Here is where it gets tricky. Medigap plans were created to work WITH Original Medicare Part A and Part B. Medicare Advantage plans were created to REPLACE Part A and Part B.

With Medigap, your plan will cover anything that Medicare covers. No ifs, ands, or buts. With Medicare Advantage, you’re leaving Original Medicare and going with a private carrier who is getting paid by Medicare to take on your risk. Yes, they must cover the same services Part A and Part B cover, the caveat is they can CHOOSE how much they want to cover for that service.

How Coverage Works with Medigap vs. Medicare Advantage

If you get diagnosed with a serious illness, Medicare & Medigap will cover it. Depending on the letter plan you choose, you may spend zero out of pocket outside your monthly premium or maybe the Part B deductible, which currently is $198. All plans will cover the 20% coinsurance under Part B. Basically, you don’t have to worry about how much you’ll end up spending out of pocket as you use your benefits.

With a Medicare Advantage plan, if you get diagnosed with a serious illness, there is a real chance you’re going to hit the MOOP of $6,700. You have copays for every single visit, you have a limited network of doctors to choose from, your cost-sharing is much higher. They also require prior authorization for many services & surgeries. If you or your doctor don’t submit the paperwork properly because you didn’t know prior authorization was needed… guess who’s responsible for the cost. YOU!

Why Is There No Premium for Medicare Advantage Plans?

Why else would Medicare Advantage plans offer zero-dollar monthly premiums? How would they make money? They make money between Medicare paying them $1,000 a month to take on your risk and then charge you, the beneficiary, copays, and coinsurance for everything.

To summarize… some supplemental coverage is better than none. But if you can afford the premiums for a Medigap plan, always go with that option. Medicare Advantage should only be if you cannot afford Medigap.

Can You Go Back to Original Medicare from an Advantage Plan?

Maybe. If you go with a Medicare Advantage plan, realize it was not the coverage you thought it was, and try to go back to Original Medicare and get a Medigap plan, you may not ever be able to. There is a Special Enrollment Period called trial-rights where if they only had their Medicare Advantage plan for 12-months or less, they can switch back to Original Medicare and enroll in Medigap without answering health questions.

What Happened to the Medicare Advantage Disenrollment Period?

Remember the Medicare Advantage Disenrollment Period that went away? Well, they brought it back and named it the Medicare Advantage Open Enrollment Period. It runs from January 1st- March 31st every year.

They had to bring this enrollment window back because so many beneficiaries were enrolling in an Advantage plan during AEP in the fall, went to use their benefits in January, and realized it was not the coverage they wanted.

Without this enrollment window, these beneficiaries had to wait an entire year to make a switch. If these plans were so great, why would CMS feel the need to bring back an enrollment period that is ONLY FOR Medicare Advantage enrollees to make changes?

Can I Change My Medicare Advantage Plan After Open Enrollment?

You can change your Medicare Advantage plan after the Annual Enrollment Period ends and the Medicare Advantage Open Enrollment Period begins on January 1st. This enrollment window ends on March 31st.

Why Are There So Many Ads for Medicare Advantage Plans?

The commercials that are all over TV during the Annual Enrollment Period can be misleaading. They claim that Medicare Supplement plans are more expensive than Medicare Advantage plans due to the higher premiums. The commercials lead the Medicare community to believe that no matter what, Medicare Advantage is the the best and only option.

Also, the extra dental, vision, and hearing benefits are one of the biggest complaints we hear from clients. The benefits are minimal. They are better off enrolling in a stand-alone dental, vision, or hearing plan.

What is the Truth About Medicare Advantage Plans?

The truth about Medicare Advantage plans is simple. They do help fill in some of the gaps in Original Medicare coverage, but they have their own set of gaps in coverage as well as many limitations.

Going with just Original Medicare leaves you vulnerable to high out-of-pocket medical expenses. If you cannot afford a Medigap plan, then yes, enroll in a Medicare Advantage plan.

Lindsay Malzone

Lindsay Malzone is the Medicare expert for MedicareFAQ. She has been working in the Medicare industry since 2017. She is featured in many publications as well as writes regularly for other expert columns regarding Medicare. You can also find her over on our Medicare Channel on YouTube as well as contributing to our Medicare Community on Facebook.

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