When you’re ready to sign up for Medicare, you actually have some options. Medicare Advantage (MA) is an alternative to Original Medicare, and while it’s not the right fit for everyone, it is a valuable option for many individuals turning 65.
MA plans are offered by private insurance companies, and by law, they have to provide at least the same coverage as Medicare.
You can think of Medicare Advantage plans as “pay as you go” health coverage. You don’t pay much (if anything) just to have the plan since most are $0 premium. However, you might pay $10 to see your doctor, 20% coinsurance to pick up your medications, and $600 if you spent a couple days in the hospital.
If you see yourself as a healthy individual who historically has only seen the doctor for an annual checkup, a Medicare Advantage plan can be a wonderful money-saving alternative to Original Medicare with a supplement.
Medicare Advantage’s Extra Benefits
While each plan is different, many plans offer some combination of extra benefits.
- $0 drug deductible
- Free vision exams
- Free dental exams
- Free hearing exams
- $500 benefit for dental
- $350 benefit for eyewear
- Silver Sneakers free access to over 14,000+ fitness centers
- Allowance for OTC drugs and supplies
A Look Inside a Typical Medicare Advantage Plan
Plans vary, but this gives you an idea of how a typical MA plan is structured.
- $0 premium (or very low premium)
- $0-$25 office visit copays
- $275-$295 copays for inpatient hospital care (first 5 or 6 days, then it’s $0 copay)
- $90 per ER visit (reimbursed if you’re admitted to the hospital within 24 hours)
- 20% coinsurance for prescriptions (note: not all plans include drug coverage)
- $4,600-$6,700 out of pocket maximum
Frequently Asked Questions
Q: Do Medicare Advantage plans have provider networks?
A: Yes, MA plans have networks for doctors, hospitals, and pharmacies. It’s important to see if your preferences are included in your network. If you see an out-of-network doctor or go to an out-of-network hospital, you’ll either pay much more for the service, or it may not be covered at all.
Q: How do the MA networks work if I travel down south for the winter?
A: Sometimes, Medicare Advantage plans have networks that are limited to a single zip code, which means it would not work in multiple states. On the other hand, some plans offer features that allow members to receive limited in-network coverage in another state. In any case, because of the limited networks, it’s hard for us to recommend this type of plan to snowbirds or individuals that are always on the road.
Q: Who do you generally recommend a Medicare Advantage plan to?
A: Medicare Advantage is usually a great fit for veterans and individuals who are dual eligible (eligible for both Medicare and Medicaid). Medicare Advantage can also be a good option for everyday consumers who prefer to have a higher deductible or out-of-pocket maximum in exchange for lower premiums.
Q: Do you still have to pay the Medicare Part B premium if you have a Medicare Advantage plan?
A: Yes, you do. The Medicare Part B premium (for most people) is automatically taken out of their social security check, so you won’t even notice it. But yes, you still have to pay the Medicare Part B premium even if you choose Medicare Advantage.
Q: When can I sign up for a Medicare Advantage plan?
A: You can sign up for a Medicare Advantage plan when you first become eligible for Medicare, when you turn 65, during the Annual Enrollment Period which is October 15-December 7 every year, or during a Special Enrollment Period. This can get confusing, so please reach out to us if you’re interested in enrolling in a Medicare Advantage plan. That’s what we’re here for!
Q: What about this Medicare MSA I’ve been hearing about – isn’t that a Medicare Advantage plan?
A: Yes – the Medicare Medical Savings Account (MSA) is technically a Medicare Advantage plan. However, it’s set up so differently that we created a special page to help explain it. Visit the Medicare MSA page to learn more.
Q: How is it possible to have MA plans with $0 premium?
A: The government happily pays private insurers to handle your healthcare. For the purpose of this example, let’s just say the government pays the MA company $800 per month to insure you. The MA company hopes that you cost them less than $800 per month, and to make their plan appealing, they offer it for $0 premium.
Q: What’s the difference between Medicare Advantage and Medicare Supplements?
A: A Medicare Supplement is an insurance policy that’s added to Original Medicare. It provides additional coverage that fills in the gaps of your Medicare coverage. Medicare Advantage, or Medicare Part C, is a private plan option, sold by private insurance companies, that replaces your Original Medicare coverage. You can read more about the differences here.