Millions of people with Medicare choose a Medicare Advantage plan, a commercial health plan that contracts with the government to deliver Medicare benefits, over traditional Medicare. Why enroll in a Medicare Advantage plan over traditional Medicare? You could save money, but it’s a gamble.
Medicare Advantage plans generally have lower upfront costs than traditional Medicare. So, if you do not need a lot of health care, you could save money you might otherwise spend on Medicare supplemental insurance you need with traditional Medicare. The typical $2,500 to $3,000 cost for supplemental insurance is often a big stretch, if not prohibitive, for people.
It is also generally easier to enroll in a Medicare Advantage plan than traditional Medicare. You simply sign on the dotted line. With traditional Medicare, unless you have retiree coverage or Medicaid, you need to sign up for Medicare supplemental insurance and also Part D prescription drug coverage. That said, you can get free assistance enrolling from your local State Health Insurance Program. And, once you’re signed up, you have far less paperwork and bureaucracy in traditional Medicare than you have in a Medicare Advantage plan. You generally don’t see a bill or need authorization in order to get care.
Some Medicare Advantage plans offer benefits not available in traditional Medicare. For example, some offer transportation services if you need to go to the doctor. That can be pretty great. The tradeoff there is that Medicare Advantage plans tend to take a narrow view of Medicare benefits; in addition to restricting your access to doctors and hospitals, they may wrongly deny or delay your care a lot more frequently than traditional Medicare. The Office of the Inspector General reports widespread Medicare Advantage wrongful denials and delays of care.
Finally, some Medicare Advantage plans actually manage your care and may do a good job of overseeing your care to ensure you get the services you need. For example, some people say that Geisinger, Intermountain and Kaiser offer good care. But, in these health plans, you still have a restricted network of doctors and face huge costs if you need care out-of-network. Though traditional Medicare is not “managed,” a good primary care doctor in traditional Medicare can manage your care as well as a doctor in a managed care plan.
Bottom line: If you are in good health, odds are that you will save money and get the care you need in a Medicare Advantage plan, so long as you choose it carefully. But, you are also restricting your choice of doctors, hospitals and other care providers and gambling with your health and pocketbook.
If you can afford traditional Medicare and you opt for a Medicare Advantage plan, you take three serious gambles:
- You take a gamble that if you develop a complex condition or are seriously injured that you will be able to see the doctors and use hospitals you want to see and use, as well as the rehabilitation facilities and nursing homes.
- You take a gamble that your out-of-pocket costs for your care are not many thousands of dollars, and you can afford these costs.
- You take a gamble that you will not need complex care outside of your community–while you are away at a second residence, traveling, or staying with your child or another close family member or friend. If so, your out-of-network costs could be through the roof.
As of January 1, 2019, you have the right to enroll in, or disenroll from, your Medicare Advantage plan between January and March 31 of each year as well as during the fall Open Enrollment season and switch to traditional Medicare. But, whether you should exercise that right depends upon whether you have supplemental coverage to fill gaps in traditional Medicare. Only four states guarantee people the right to buy Medigap supplemental coverage at any time–Connecticut, Maine, Massachusetts, and New York. And, some Medigap insurers will sell you coverage after 65.
Note that many in Congress would like to move everyone into a Medicare Advantage plan so that the federal government can cut payments to these plans and shift more costs onto people with Medicare. So long as traditional Medicare is in the mix, Medicare Advantage plans are likely to offer fairly generous benefits to compete. Their enrollees have the protection of switching to traditional Medicare if they are unsatisfied with their care. Without traditional Medicare, all bets are off.
Here’s more from Just Care:
- What’s the Medicare premium in 2019?
- Social Security benefits will rise 2.8 percent in 2019, but checks may not
- Ten ways Medicare Advantage plans differ from traditional Medicare
- Don’t be misled by “five-star” nursing home ratings
- New study finds Medicare Advantage plan enrollees end up in lower quality nursing homes than people in traditional Medicare