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Life Health > Health Insurance > Medicare Planning

Medicare Advantage Plans: A Medicare Customer Question

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What You Need to Know

  • Sometimes, you have to start by talking about the most basic of basics.
  • Many clients have no idea what Medicare Advantage is.
  • One point to make is that Medicare Advantage plans have provider networks.

Medicare Advantage Plans are another way to get your Medicare Part A and Part B coverage. Enrollment in these plans has more than doubled within the past 10 years, and nearly half of Medicare beneficiaries are now enrolled in these private plans, according to government data.

Despite this surge in enrollment, many Americans already eligible for Medicare, as well as those who will be soon, don’t know much about Medicare Advantage plans or how the benefits differ from those offered under original Medicare.

Here are a couple of basic but important questions probably on the minds of those current and future clients who are trying to make the best and most cost-effective choice regarding their health coverage.

The Question

What is the difference between Medicare Advantage and original Medicare? How are the benefits they offer different?

The Answer

When you become eligible for Medicare, there are a few ways to go about ensuring your health care needs are met. Original Medicare includes hospital insurance (Part A) and medical insurance (Part B), and in most situations will cover 80% of health care costs, leaving the beneficiary responsible for 20%. Medicare Advantage, which is also known as Part C, is an “all in one” option that includes Part A, Part B, and usually drug coverage (Part D). Most plans also offer extra benefits that original Medicare doesn’t cover, such as vision, hearing and dental.

The biggest difference between the two options is how they are administered. Medicare Advantage plans are similar to employer-based plans in how they work. You pay a premium for the plans and then may have a copay or coinsurance as you use the plan. You’ll receive the same Part A and Part B coverage as someone with original Medicare, but it will be offered through Medicare-approved private companies, according to rules set by Medicare. Another important difference is that in most cases, you’ll need to use in-network providers, as the plan may not cover the cost of medical services from out-of-network providers, or the costs wouldn’t be applied toward your out-of-pocket maximum.

If you’re considering a Medicare Advantage plan, one of the key benefits to keep in mind is that these plans may have lower out-of-pocket costs than original Medicare, making health care more affordable. Medicare Advantage plans replace original Medicare’s 20% coinsurance, as you are responsible for copays and coinsurance set by each plan for different services. In addition, beneficiaries on Medicare Advantage plans often have access to some benefits not covered by original Medicare, such as eye exams and glasses, telehealth, dental care, a fitness benefit, and hearing aids.

Bethany CissellBethany Cissell is a health care insurance services specialist at Allsup.

(Image: Adobe Stock)


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