Should I Switch to Medicare Advantage?
Medicare Advantage plans are a popularly advertised, one-stop shop for services not offered by Traditional Medicare, such as Part D (drug coverage) and some dental, vision, and hearing services. However, Medicare plans are constantly changing. New research shows concerning trends in Medicare Advantage overcharges, fraud, and billing abuse.
Open enrollment for Medicare Advantage plans begins from January 1st to March 31st, 2023. Whether you are browsing plans for yourself or a loved one, this article provides you with the latest information on the Medicare market to choose the best health coverage this enrollment season.
Medicare Advantage and Medicare Comparison
First, compare the following coverage options in both plans to determine which best suits your health needs.
Medicare Advantage vs. Original Medicare
|Medicare Advantage||Original Medicare|
|Plan Management||Private insurance companies administer benefits.||The federal government administers benefits.|
|Plan Parts||Plans include parts A, B, and C, and most include Part D. You can’t buy and don’t need Medigap.||Plans include Part A and Part B. You can purchase a Medicare Supplement, Medigap, for additional coverage.|
|Network Coverage||You can only utilize in-network providers and services unless for an emergency or dialysis. Referrals aren’t needed for specialist visits in most cases.||You can visit any doctor or hospital in the U.S. that accepts Medicare. Referrals may not be needed for specialist visits.|
|Dental Coverage||Available on some plans.||Not available.|
|Vision Coverage||Available on some plans.||Not available.|
|Hearing Coverage||Available on some plans.||Not available.|
|Gym Membership Discounts||Available on some plans.||Not available.|
|Prescription Drug Coverage||Available on some plans.||Must purchase a Part D plan.|
Sources: Center for Medicare & Medicaid Services, Forbes Health
Original Medicare and Medicare Advantage Pros & Cons
Now that you better understand the services available in Original Medicare versus Medicare Advantage plans, let’s examine the pros and cons.
Medicare Advantage Pros:
The one-stop shop for Medicare Advantage plans makes for an attractive, simplistic option for receiving the care you need. Medicare Advantage plans typically include your drug plan and don’t require a separate supplemental policy as traditional Medicare beneficiaries do.
MA plans also help you avoid running out of covered hospital days, helping mitigate costly expenses in the long run.
Personalized Plan Structure
Medicare Advantage offers different plan types to help you identify your situation best. For instance, if you have a chronic health condition, SNP Advantage plans can be of assistance in reducing your medical costs.
We asked a United Health Agent why seniors should work with an agent to consider MA plans over Traditional Medicare. They stated, “Medicare Advantage Plans are a great option compared to Traditional Medicare plans because they act as a stand-alone plan that includes your prescription drug plan and premium costs. Health agents can help navigate plan choices and upgrades seamlessly, where Traditional Medicare has a fixed offer of benefits”.
Many MA plans charge low or no monthly premiums and cap out-of-pocket expenses. For instance, in-network expenses are capped at $8,300 (excluding drugs) for 2023, or $12,450, depending on if your plan allows you to use out-of-network providers.
Medicare Advantage Cons:
Limited Service Providers
Generally, you can only utilize services from doctors who are in the plan’s network. This limits your choice of providers and facilities you can visit, especially if you choose one of the more popular MA plan types, such as an HMO. MA costs depend on how much care you need, making it difficult to budget health care costs.
With many options to choose from in Medicare Advantage plans, be aware of additional costs advertisements may push you to consider. Often, these plans can be costly and heavily marketed. “How many times do I have to tell these telemarketers that I don't need help picking out my Medicare Advantage plan? And they're so smug, like, "Oh, I'm young, I can read a script." And they offer you grocery cards and then say, "Oh, you don't qualify." -@DeniForestek, Nov 25, 2022.
Prior Authorization Approval
Unlike traditional Medicare, you may need referrals for specialist visits in MA plans. Some insurers require “prior authorization” for many procedures, drugs, or facilities. This can result in high out-of-pocket costs or the risk of forgoing treatment due to differences in care recommendations.
If you are denied care due to plan restrictions, you can file for an appeal to get it reversed. Appeals are reversed 75% of the time, but only about 1% of beneficiaries/providers file appeals. It’s essential to know the rights and protections Medicare systems have in place to serve your healthcare needs best.
Generally, medical care outside of the U.S. isn't covered. Some plans offer supplemental benefits that cover emergency and urgently needed services when traveling. However, this can cause issues if you travel often. Check your plan's coverage options to see if additional benefits are available for travel.
Original Medicare Pros:
Original Medicare has no limitations on the providers, hospitals, and clinics you can visit to receive care.
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No Prior Authorization Required
Traditional Medicare beneficiaries avoid the delays and stresses of needing prior authorizations for procedures, drugs, and facilities.
Original Medicare Cons:
No Cap on Out-of-Pocket Expenses
The 20% copay required by traditional Medicare can add up quickly in hospitalization, testing, and procedure expenses. Because of this, many people purchase a supplemental insurance plan such as Medigap. You may also qualify for supplementary coverage through an employer or Medicaid to help cover costs.
Medigap policies can be costly, averaging $150 to $200 monthly.
Does Not Include Drug Coverage
The biggest downside to traditional Medicare is that it doesn’t include drug coverage. You must purchase a separate Part D plan for coverage. In 2023, the estimated average monthly premium for Medicare Part D stand-alone drug plans is $43 based on data from the Kaiser Family Foundation.
The $35 cap for a month’s supply of insulin for part D enrolees will also begin in 2023 under provisions included in the Inflation Reduction Act.
Costs to Consider When Choosing a Medicare Plan
Medicare market plans constantly fluctuate in their costs, coverage, and options. Below are charts highlighting the typical costs associated with Parts A, B, and D.
Medicare Part A Costs
Part A (Hospital Insurance) Costs
|Part A costs:||What you pay in 2022:|
|Skilled nursing facility stay|
|Home health care|
Medicare Part B Costs
Part B (Medical Insurance) Costs
|Part B costs:||What you pay in 2022:|
|General costs for services (coinsurance)|
|Clinical laboratory services|
|Home health care|
|Inpatient hospital care|
|Outpatient mental health care|
|Partial hospitalization mental health care|
|Outpatient hospital care|
Medicare Part D Cost
The cost of Medicare Part D drug plans depends on your income. You'll pay an income-related monthly adjustment amount in addition to your plan premium if your income exceeds a specific limit. The chart below breaks down your estimated drug plan monthly premium based on your income.
Part D Monthly Premium Costs
|If your yearly income in 2021 was||You pay (in 2023)|
|File Individual Tax Return||File Joint Tax Return||File Married & Separate Tax Return|
|$97,000 or less||$194,000 or less||$97,000 or less||Your plan premium|
|above $97,000 up to $123,000||above $194,000 up to $246,000||N/A||$12.20 + your plan premium|
|above $123,000 up to $153,000||above $246,000 up to $306,000||N/A||$31.50 + your plan premium|
|above $153,000 up to $183,000||above $306,000 up to $366,000||N/A||$50.70 + your plan premium|
|above $183,000 and less than $500,000||above $366,000 and less than $750,00||above $97,000 and less than $403,000||$70.00 + your plan premium|
|$500,000 or above||$750,000 or above||$403,000 or above||$76.40 + your plan premium|
Should I Switch to Medicare Advantage?
If you are looking for an all-in-one package that will include coverage for additional services not offered by traditional Medicare, Medicare Advantage may be a good fit for you. You can join or switch to a Medicare Advantage plan during these enrollment periods:
- Initial Enrollment Period.
- This is when you first become eligible for Medicare when you turn 65 or are newly eligible for Medicare because you have a disability and are under 65.
- Open Enrollment Period. (Oct. 15 - Dec.7)
- The open enrollment period for Medicare spans October 15th to December 7th each year. You can join, switch, or drop a plan during this time. Your coverage will begin on January 1st as long as you sign up by December 7th.
- Medicare Advantage Open Enrollment Period (Jan. 1 - March 31)
- The Medicare Advantage Open Enrollment Period spans January 1 - March 31 each year. If you’re already enrolled in a Medicare Advantage Plan, you can switch to a different Medicare Advantage plan or Original Medicare with a separate drug plan. During this period, you can only switch plans once.
It is relatively easy to switch between Medicare Advantage plans. Suppose you want to change from an Original Medicare to a Medicare Advantage plan. In that case, you’ll need to consider the issues you can run into. For example, you risk giving up your Medigap policy if you enrolled in one. You may not be able to receive your Medigap policy back if you change your mind and want to switch back to traditional Medicare.
What is Medicare Advantage?
Medicare Advantage, also known as "Part C" or "MA Plans," is an alternative Medicare health plan offered by approved private companies that contract with traditional Medicare. MA plans include parts A (Hospital Insurance) and B (Medical Insurance) of Medicare plans. Part D (prescription drug coverage) is offered in most MA plans but is not guaranteed. Many plans have no premiums and low or no deductibles and will set limits on maximum out-of-pocket costs paid during a plan year.
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How Medicare Advantage Plans Work
When you enroll in an MA plan, Medicare pays the company offering your MA plan a fixed amount. Agents (brokers) play a significant role in presenting information to consumers shopping for MA, Medicare Supplement (Medigap), and Part D plans.
These plans must adhere to the same rules set by Medicare. You have ensured the same rights and protections you'd receive under Orginal Medicare. However, MA plans can also charge different out-of-pocket costs and set different rules for how you receive services. Each year, these rules can change. Your plan must notify you of any changes before beginning the next enrollment year.
Be Aware of Concerning Marketing Trends
Unfortunately, with cost changes, an equitable communication system is only sometimes the case. A new report from the U.S. Senate Committee on Finance showcased findings on deceptive marketing practices within Medicare Advantage plans. 9 out of 10 states studied reported increased complaints to the insurance commissioners or SHIPs (State Health Insurance Assistance Programs) from 2020 to 2021. Mailers, television ads, telemarketers, and robocalls were the reported primary sources of complaints.
Medicare officials have promised to increase policing concerning deceptive marketing tactics from marketing firms. Some things to look out for when sorting your Medicare mail pile are if they are from official government websites, such as medicare.gov. Mailers sometimes use false or misleading marketing materials with the word "Medicare" on them.
"It's very important to look into the quality of different plans, quality metrics, and the CMS star ratings to get a sense of how the plans are performing with regard to poor health outcomes and low satisfaction ratings. Medicare makes all of this publicly available," said Dr. Theodore Long, former Senior Medical Officer for Quality Measurement at the CMS. With this information in mind, be mindful of marketing concerns and trends, and make sure the information presented to you is from a trusted, reliable source.
Medicare Advantage Plans
The selection process and plans under MA can look complicated and overwhelming. Over the past decade, Medicare Advantage plans have significantly increased, with an average of 38 plans available in 2022. With many plans available, it’s essential to consider your needs before switching to a Medicare Advantage plan. Factors include your budget, health history, and care preferences.
When reviewing your options for a Medicare Advantage plan, you’ll see the most common plan types to choose from:
Common Medicare Advantage Plans
|Health Maintenance Organization Plans (HMO)||Primarily focused on in-network healthcare services.|
|Preferred Provider Organization Plans (PPO)||Different rates are charged depending on whether services are in- or out-of-network.|
|Private Fee-for-Service Plans (PFFS)||You can receive care from any Medicare-approved provider who accepts the approved fees from your plan.|
|Special Needs Plans (SNPs)||Additional assistance with medical costs for people with specific chronic health conditions.|
|Medicare Savings Account (MSA)||High-deductible health plan combined with a medical savings account.|
Source: Mira, Healthline
Cost Factors to Consider
Your location plays a significant role in determining the cost of Medicare Advantage plans. Prices are typically lower when using providers in your plan's network and service area. You can find the specific cost of Medicare Advantages plan by visiting Medicare.gov and entering your zip code. After entering your zip code, the site will show you Medicare Advantage premium costs specific to your location. These costs include Part B premiums and MA plans.
What is Medicare?
Original Medicare is the federal health insurance program for people 65 or older, certain people with disabilities, or people with End-Stage Renal Disease. The 2 different parts of Medicare consist of Parts A (Hospital Insurance) and B (Medical Insurance).
How does Medicare work?
The federal government manages coverage for Original Medicare. In most cases, there is a cost for each service utilized, and you pay for services as you receive them. You pay a deductible at the start of each year when you receive benefits. You'll also pay about a 20% coinsurance for the Medicare-approved service.
Original Medicare doesn't cover most prescriptions. If you want to receive drug coverage, you can join a separate drug plan (Part D). Cost assistance for Medicare services exists, such as the Medicare Supplement Insurance (Medigap) policy. Medigap can help pay some remaining health care costs such as copayments, coinsurance, and deductibles. Additionally, Medigap policies can cover services that Original Medicare doesn't, such as emergency medical care for travel outside of the U.S.
Medicare Advantage Frequently Asked Questions (FAQs)
Here are some frequently asked questions to help you navigate your coverage options confidently.
How do I choose the best Medicare Advantage plan for me?
As we’ve learned, Medicare plans are constantly changing in what they offer. Keep these considerations in mind when exploring your options:
- Cost. Does the plan fit your budget and health needs?
- In-network providers you’d like to keep from your previous plans. Will your plan require you to change providers?
- Medication coverage. Will your plan cover your required medications?
- Centers for Medicare & Medicaid Services (CMS) star rating. What is the quality rating of your plan? Have they received any complaints about the quality of care? CMS star ratings are typically released each year in October. You can find them on Medicare.gov by using the Medicare Plan Finder tool.
Who are the best Medicare Advantage Providers?
Based on a Forbes Health report, 6 Medicare Advantage providers were identified as the best plan options for 2023 based on benefits offered, CMS ratings, consumer feedback, and more. The plans are as follows:
- Blue Cross Blue Shield. CMS rating: 4.17/5.
- Humana. CMS rating: 4.02/5.
- Anthem. CMS rating: 4.19/5
- United Healthcare. CMS rating: 4.06/5
- Cigna. CMS rating: 4.17/5
- Aetna. CMS rating: 3.87/5.
What are some resources I can access to help with these decisions?
Medicare Website Tools
Medicare makes updates regarding changes in policies and plans available on their Medicare.gov website. You’ll find many helpful resources within the website that can provide you with the reliable information needed to make decisions best suited to your personal health preferences.
The Part D plan finder is a helpful tool to sit down and assess which medications you take and if they are covered in your prospective plans.
Medicare Assistance via Phone
You can also call the toll-free number, 1-800-MEDICARE, to further assist you with additional questions you may run into.
State Health Insurance Assistance Program
Federally funded State Health Insurance Assistance Programs (SHIP), exist to help you navigate and compare Medicare and drug plans. Contact your local program to get connected with trained, unbiased volunteers equipped to ensure a smooth process start-to-finish. Appointments can fill up quickly as enrollment deadlines approach. Make sure to set a reminder to contact your nearest provider before the Dec. 7 enrollment period ends.
Medicare Advantage can be a good option if you frequently use services not offered under Traditional Medicare plans. With open enrollment nearing the months of January 1st to March 31st, 2023, the number of advertisements pushing for Medicare Advantage enrollment can feel more confusing than helpful. Remember, Medicare makes all its information publicly available on its website, medicare.gov. Make sure you compare plans, costs, and coverage specific to your health needs and preferences from a reliable, trusted source.
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Regine Roquia is a Masters of Public Health Candidate at New York University studying Public Health Policy & Management. She is passionate about creating the culture she wishes to see by working to increase health literacy.