Make no mistake. Traditional Medicare, which is government-administered, and Medicare Advantage, which is administered by corporate insurers, are as different as night and day. But, it’s easy to think otherwise, as they both offer Medicare benefits. Here’s what you should ask yourself to choose between them:
Can you see the doctors you need to see wherever you happen to be in the US? Only traditional Medicare covers your care from virtually any doctor or hospital in the US. Medicare Advantage plans generally only cover care from a restricted network of doctors and hospitals, often only in your community. When they cover care from health care providers outside of their network, you are often left paying 40 percent of the bill out of pocket.
Will you be covered for all the Medicare services your physicians say you need? Only traditional Medicare covers these services. Medicare Advantage plans often second-guess your treating physicians. Medicare Advantage plans too often inappropriately delay and deny you needed care, even though they are supposed to cover the same medically necessary services as traditional Medicare.
Will you face administrative obstacles to care, such as PCP referrals and prior authorization requirements for specialty care? Only traditional Medicare allows you to go straight to the physicians and hospitals you want to use without creating barriers. Medicare Advantage plans too often require you get their permission in order to get the treatments you need, at times second-guessing your physicians. They typically cover 25 percent fewer services than traditional Medicare.
Will your Medicare plan profit from delaying and denying care? Only traditional Medicare gives your health care providers an incentive to provide all the care you need. Medicare Advantage plans receive a fixed amount from the government to cover your care, regardless of how much they spend on your care. The less money a Medicare Advantage plan spends on your care, the more money the Medicare Advantage plan has for its shareholders. They profit from delaying and denying care.
Can you limit your out-of-pocket health care costs? Only traditional Medicare provides you with the option of buying supplemental insurance to fill gaps in coverage. So, when you need care, you don’t have to think about out-of-pocket costs. But, traditional Medicare does not have an out-of-pocket limit, so if you don’t have Medicaid, which fills gaps in coverage, or supplemental insurance—which could easily cost $2,500 a year—your out-of-pocket costs could be substantial. Medicare Advantage has an out-of-pocket limit. But, that limit can be as high as $8,300 a year for in-network care alone in 2023, depending upon the plan you choose. So, when you need care, your costs could be hundreds, if not thousands, of dollars.
How will you get prescription drug benefits? You can buy a Medicare Part D prescription drug benefit if you’re in traditional Medicare for about $30 a month. If you’re in Medicare Advantage, prescription drug benefits are generally included. Either way, Medicare only covers some of the costs of your drugs. You need to check to see whether the plan you choose will cover the drugs you need at a reasonable cost to you.
Do you want “extra” benefits? This is a trick question. Traditional Medicare does not cover vision, hearing and dental care or transportation services and gym memberships. Medicare Advantage often tacks on one or more of these benefits to its package as a way to lure in enrollees. If these are important to you, make sure they are meaningful benefits. Medicare Advantage plans often force you to use a small group of providers for these services as well as to pay substantial amounts out of pocket for them. And, remember that if you need a lot of medical care, Medicare Advantage plans are likely to cover fewer services than traditional Medicare.
Want to know which Medicare Advantage plan is best for you? Throw a dart and say a prayer. Many Medicare Advantage plans have long histories of engaging in consumer fraud. A lot of them have been found to persistently inappropriately delay and deny people needed care. A large portion of them do not have cancer centers of excellence in their networks and, if they do, the networks are always changing. The government is not able to assess meaningful quality differences among them. And, the five-star rating system is largely a farce.
Can you save money by joining a Medicare Advantage plan? Yes. You can save on the cost of supplemental insurance and Part D prescription drug coverage. But, if you develop a serious condition and need expensive care, you will likely pay a lot more.
Can you enroll in a Medicare Advantage plan while you’re healthy and then switch to traditional Medicare when you need costly care? Theoretically you can. But, in practice, you take a big financial and health risk. Unless you live in Maine, Massachusetts, New York or Connecticut, companies offering Medicare supplemental insurance are not required to sell you coverage to fill gaps in traditional Medicare after you are first eligible for Medicare, except in limited situations. If you can’t buy supplemental coverage, you are effectively locked into Medicare Advantage in order to protect yourself financially, because traditional Medicare has no out-of-pocket cap.
Bottom line: If you can afford supplemental coverage in traditional Medicare or have Medicaid, you and your family can sleep well, knowing you will be able to get the care you need, wherever you are in the US, whenever you need it, without worry about out-of-pocket costs. Don’t count on that in Medicare Advantage.
Here’s more from Just Care:
- Four things to think about when choosing between traditional Medicare and Medicare Advantage plans
- Government rules won’t curtail Medicare Advantage bad acts without stiff penalties
- Medicare Advantage plans fail to release data required for oversight
- What are your Medicare premium and other costs in 2023?
- Well-kept secrets of Medicare Advantage plans
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