Medicare Advantage plans are another way to receive your Medicare benefits. They come in many types and options. I’m sure you have seen a million commercials about zero-dollar premiums, and all-in-one plans that include dental, vision, and hearing, and see if you qualify for a reduction of your Medicare Part B premium.

A rational person thinks, “ok, what’s the catch” or “this sounds too good to be true.”

The truth is that Medicare pays the carrier to administer your healthcare. Medicare Advantage plans take over your health care costs and risks from Original Medicare. The better the companies keep your health, the more money they make.

Why Are Medicare Advantage Plans Good?

A Medicare Advantage plan’s primary goal is to ensure you stay as healthy as possible. After all, the less you need to have costly medical procedures and treatment, the more money they keep.

Some top Medicare Advantage plans give additional benefits that Medicare doesn’t offer. Some lower the amount you pay for your Medicare Part B. Others help with food, gym memberships, and a range of additional benefits.

How Does a Medicare Advantage Plan Get Paid?

Medicare pays the carrier for every Medicare beneficiary who enrolls in a plan. The carrier receives a fixed amount annually. It’s in their best interest to keep you healthy. The less you have to use the plan, the more the plan keeps.

How Do Some Medicare Advantage Plans have $0 Premiums?

Medicare pays them with the money you pay into Medicare. Everything in life is giving and taking. If you have a $0 premium plan, you usually will have a higher copay for services or a tighter network.

You’ll notice the lower costs, in many cases, are associated with having a tighter network. Plans with a more extensive PPO network may have to pay more when you use it.

Why do some people dislike Medicare Advantage plans?

Complaints about these plans usually derive from an incorrect explanation of details. Unfortunately, this happens occasionally.

Many people hear that the plan is free. That person assumes free means they never pay anything, for example.
You always must pay your Part B, and you could have co-pays, deductibles, or coinsurance.

Now, think about it rationally. Does it make sense that the plans would be completely free? It replaces your Original Medicare. Original Medicare has additional costs. Wouldn’t something equal have other costs?

Why would I want to replace my Original Medicare with a Medicare Advantage plan?

There are many reasons why a Medicare Advantage may be proper for you.

Cost

In many areas, the premiums are $0. Instead of paying Medicare’s large deductibles and unpredictable coinsurance, you now have small fixed co-pays for most services.

Medicare Advantage plans also have a cap on how much you can spend on hospital and medical services. When you stay on Original Medicare, you do not have that protection.

Extras

Plan extras come in many forms. Most plans will offer some form of dental, vision, or hearing coverage. Most will give you an allowance to use to buy over-the-counter drugs.

Some give you no-cost transportation to help you get to doctor appointments. They could pay for a portion of your Part B premium. Many have gym memberships. Also, your Medicare Advantage plan might include a flex card — a debit card that can be used to purchase medically necessary items.

Plan extras will vary greatly depending on the plan and service area.

What about high maximum costs and how easy they are to hit?

Some plans have a high maximum out-of-pocket, but many do not. In some areas, the maximum out-of-pocket (MOOP) is as low as $1,200 per year.

PPO plans usually have a higher out-of-pocket limit, One for in-network and one for out-of-network. In many cases, your maximum out-of-pocket would be less than the cost of premiums on a Medigap plan.

Most people won’t hit the MOOP. Office visits are as low as $0 per visit, and hospital visits are as low as $20 a day in some areas.

Most people that hit the MOOP have primary chronic conditions. Conditions like cancer or a medical issue that requires dialysis.

You must consider the source. Some sites that sell only one type of plan will spin it to make the other sound scarier.

What Holes are in a Medicare Advantage Plan?

The holes in a Medicare Advantage plan and Original Medicare are similar. You’ll pay up to 20% for prescription drugs administered at the doctor’s office. The same goes for chemotherapy and dialysis.

Durable Medicare Equipment is another service covered the same or similar to Original Medicare. You’ll pay 20% of the cost in the majority of cases.

Fortunately, Medicare Advantage plans have the MOOP feature that will limit how much you’ll pay for the year. Original Medicare does not have a cap.

Plans coverage changes every year

These plans come with an annual contract. There will be changes yearly in your plan. Sometimes its copayment increases or decreases. Sometimes there are new benefits added or benefits removed.

The annual change in benefits is typically minuscule. It’s wise to review the plans annually, as another plan may fit your needs better the following year. Your needs could have changed as well since the previous year.

Misconceptions of Medicare Advantage Plans

I heard that doctors do not like Medicare Advantage plans?

While some doctors don’t like Medicare Advantage plans, it’s usually because the doctor wants to charge more than the Medicare Advantage plan allows. Some doctors only take Medicare Advantage plans instead of Original Medicare.

The majority of doctors do take Original Medicare. Many of them also accept Medicare Advantage plans. Remember that not every doctor will take every Medicare Advantage plan.

Is Medicare Advantage Plans a Ripoff or Scam?

No. Medicare Advantage is not a scam. All plans must have approval from the Centers for Medicare and Medicaid Services (CMS) and are regulated. If they don’t follow the compliance rules, they can and will be sanctioned and not allowed to market these plans for some time.

When was the last time you got a great product and wrote a review on how good it was? When was the last time a product was not up to your expectations, and you wrote one? Most people will only write a review about a negative experience.

Unfortunately, some advertisements on MA plans have that too-good-to-be-true feeling. Not all Medicare Advantage plans will have all the features in the advertisements.

Will it be hard to find a doctor?

You should have no problem finding a doctor to take your plan. The top companies that offer Medicare Advantage plan work very hard to ensure their members have sufficient options for doctors before putting plans in an area.

If you live in a rural town, the selections might be tighter.

If I decide I do not like Medicare Advantage, can I change plans?

Medicare Advantage plans are annual contracts. Changes only occur during enrollment periods. You can make changes during the Annual and Medicare Advantage Open Enrollment Period.

Special Enrollment Periods or situations allow you to change or drop your plan outside of these. I would recommend speaking with an insurance broker to see if you qualify.

How to Determine if a Medicare Advantage Plan is Good for Me

We would love to help. Call us today! You can also fill out our online request form, and we will have a licensed insurance broker reach out to assist you with your questions.

Written By:
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Lindsay Malzone, Lindsay Malzone is the Medicare editor for Medigap.com. She's been contributing to many well-known publications since 2017. Her passion is educating Medicare beneficiaries on all their supplemental Medicare options so they can make an informed decision on their healthcare coverage.
Reviewed By:
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Rodolfo Marrero, Rodolfo Marrero is one of the co-founders at Medigap.com. He has been helping consumers find the right coverage since the site was founded in 2013. Rodolfo is a licensed insurance agent that works hand-in-hand with the team to ensure the accuracy of the content.