What to Look for When Choosing a Medicare Advantage Plan

As Medicare premiums rise, a Medicare Advantage plan can seem like an attractive option. But if you are considering switching from traditional Medicare to a Medicare Advantage plan, you need to know what to look for.

What are Medicare Advantage Plans?

Medicare Advantage plans are run by private insurers, unlike traditional Medicare, which the federal government operates through contracts with insurance companies. The government pays Medicare Advantage plans a fixed monthly fee to provide services to each Medicare beneficiary under their care. The less money they spend on patient care, the more money they and their investors make. The plans often look attractive because they offer the same basic coverage as traditional Medicare plus some additional benefits and services that traditional Medicare doesn't offer at a seemingly lower cost. However, if you get sick and need specialized treatment, the costs could quickly add up.

To compare Advantage plans, go to the Medicare Plan Finder at Medicare.gov. You will see an overwhelming amount of plans. It is a great idea to talk to an insurance agent about your specific needs to narrow your options.

Deciding Whether a Medicare Advantage Plan is Right for You

Cost. Since Medicare Advantage plans are offered by private insurers, the cost of the plan varies depending on where you live. While Medicare Advantage plans usually have lower premiums than paying for traditional Medicare plus a Medigap plan, they can have higher deductibles and co-pays, especially for expensive care like cancer treatment. You need to take these out-of-pocket costs into account. Medicare Advantage plans have a cap on out-of-pocket costs, while traditional Medicare does not, but that cap can be quite high. Check the annual maximum out-of-pocket costs for the plan. If you have a high level of health costs, a low out-of-pocket maximum may be the best option.

Coverage. What coverage does the plan offer? Medicare Advantage plans must cover everything that traditional Medicare covers, but some plans offer additional benefits, such as dental, hearing, and vision. Plans may require your doctor to get approval for certain procedures. If the plan administrators disagree with your physician that a procedure is medically necessary, the plan may refuse to pay for it. You will want to find out how the plan approves treatments, refers patients to specialists, or allows patients to remain in the hospital if they are not ready to leave. You may want to check with your doctors to find out their experience with the plan and whether it frequently overrules the doctor.

Doctors and other providers. Traditional Medicare does not have any restrictions on which provider you use (as long as the provider accepts Medicare), but Medicare Advantage plans are HMOs and PPOs, meaning that not every doctor who accepts Medicare will accept the plan’s insurance. With an HMO, if you visit a doctor outside of the network, you will likely have to pay out of pocket (except in an emergency). With a PPO, you can usually see any doctor you want, but you will pay less for an in-network doctor. You will want to check if your doctor and hospital are part of the plan’s network. The best way to do this is to call your doctor’s office to confirm.

Prescription drugs. Most Medicare Advantage plans include prescription drug coverage, so you should check to make sure the plan covers all the medications you take. You should also check if you need any special authorizations for any of your medications or if there are any limits on the amount you can get. Other questions include whether your pharmacy is a preferred provider and whether you can get prescriptions by mail.

Quality of care. The Medicare Plan Finder includes a rating system that measures how well the plan manages health screenings and chronic conditions as well as how many customer complaints it receives, among other things. The ratings aren’t perfect, but they can give you an idea of the plan’s quality.

Get Help Making Tough Decisions

Learn more about Medicare Advantage plans. If you need professional advice, contact an insurance agent to explain how each policy works. You can also contact an elder law attorney near you for guidance on health care services and long-term care needs.