Once a year, in the Open Enrollment Period (Oct. 15 to Dec. 7) all seniors in Medicare have the option to switch from Original Medicare to another option known as Medicare Advantage.

Unlike traditional Medicare, where the government program acts as your insurer, Medicare Advantage benefits are provided by private companies. Most are Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). The plans cover Medicare Part A costs (hospital expenses) as well as Part B (outpatient treatments), and most offer prescription drug benefits. During Open Enrollment, you can also switch to a different Medicare Advantage Plan or switch from one of these plans back to original Medicare.

5 Medicare Advantage Features

Below are several features of Medicare Advantage that you should know before deciding which option is best for you.

1. Pricing and Coverage Vary

With traditional Medicare, pricing is simple. No matter where you live, you have a standard Part B premium to pay each month and uniform deductibles for hospital and doctor fees. Co-pays likewise follow a fairly rigid formula.

With Medicare Advantage, however, multiple insurance carriers are competing for patients. Recipients contribute the usual Part B premium, but they generally pay an additional premium on top of that.

Depending on where you live, you'll generally have access to multiple plans. Compare them based on premium amounts, deductibles and co-pays. The Medicare.gov website allows you to compare different plans in your area. You should also enter the medications you currently use to help calculate your estimated out-of-pocket expenses.

2. Customer Satisfaction Is Key

Cost shouldn’t be the only factor when considering different health insurance options. Receiving quality care and getting reliable help with your claims also goes a long way toward ensuring a positive experience.

The Medicare website is a great resource in this regard, too. It uses a star system to rate different insurers, with five representing a top mark. Among other factors, the site takes into account member experiences and how plans manage chronic conditions and provide health screenings.

Another site worth checking out is the National Committee for Quality Assurance (NCQA) website, which also ranks various Advantage plans. Consumers can quickly look up scores for customer service, prevention and treatment.

3. Watch Limits on Choosing Doctors – in Your Home State or Other States

Most private plans restrict coverage to certain doctors and medical facilities or, in the case of a PPO, charge more for out-of-network providers. That means, if you have specific health care professionals you’d like to see, you’ll want to check whether they’re part of the system ahead of time.

This feature can also complicate things for people who live in another state for part of the year or travel frequently. They could find that their plan refuses coverage if they get sick while out of town – or charges considerably more.

4. Out-of-Pocket Expenses Are Capped

One of the major benefits of Medicare Advantage is that there’s a cap on the out-of-pocket expenses a recipient has to pay in a given year. Under the Affordable Care Act, that limit is $6,700 annually. Traditional Medicare coverage has no such cap, so there’s always a risk that patients will have to pay more if they require significant care.

5. You May Need to Wait for Open Enrollment

When people first sign up for Medicare, they’re automatically enrolled in the traditional program. Those who prefer a private plan can join Medicare Advantage at that time. Otherwise, they have to wait for the open enrollment period between Oct. 15 and Dec. 7 each year to make the switch. However, if you decide you don't like the plan, you have a separate Medicare Advantage Disenrollment period (Jan. 1 to Feb. 14) to switch back to original Medicare and enroll in a Part D Prescription Drug plan.

The Bottom Line

Whether Medicare Advantage is right for you depends on your unique circumstances. Checking out the Medicare website is a good way to get the details on plans in your area, including pricing and quality ratings. Remember to consider where you'll need healthcare, as well as which doctors you'd prefer to visit, when deciding which way to go.

To read about traditional Medicare and Medigap – the alternatives to Medicare Advantage – see Medicare 101: Do You Need All 4 Parts? and Medigap Vs. Medicare Advantage: Which Is Better? These articles will also update you on Medicare Part D, the prescription drug program for seniors. (Many Medicare Advantage plans include Part D coverage.)

Related Articles
  1. Insurance

    What's The Difference Between Medicare And Medicaid?

    One program is for the poor; the other is for the elderly. Learn which is which.
  2. Retirement

    Getting Through the Medicare Part D Maze

    Having trouble sorting through your prescription drug coverage options? Try these solutions to finding the right Medicare Part D option.
  3. Insurance

    Medicare Vs. Medicaid

    Medicare and Medicaid are often confused with one another, because they are both public health-care programs. This confusion likely arises from the similarities between the two programs. After ...
  4. Retirement

    Income Relating: A New Concept In Medicare

    You can retire, but you can never retire from income tax planning.
  5. Budgeting

    The Future Of Medicare: Why You Should Be Worried

    Younger generations might want to start preparing for retirement now. Some things may not last that much longer.
  6. Insurance

    What Does Medicare Cover?

    Don't assume you're insured. Find out what you can expect from this healthcare program.
  7. Insurance

    Filling In The Medicare Gaps

    Basic Medicare is not a perfect fit for everyone - sometimes, extra policies are required to suit a person's needs.
  8. Financial Advisors

    HSAs and FSAs: How to Decide Between Them

    FSAs and HSAs are both excellent ways to help cover a portion of medical costs with pre-tax dollars. Here's how to decide between the two.
  9. Financial Advisors

    When to Develop a Client Mental Capacity Checklist

    Dementia and Alzheimer’s disease aren't uncommon for elderly clients. Here's how advisors can create a plan for when mental capacity becomes an issue.
  10. Retirement

    How Much Money Do You Need to Retire at 56?

    Who wouldn't want to retire early and enjoy the good life? The question is, "How much will it cost?" Here's a quick and dirty way to get an answer.
  1. Will Medicare pay for long-term costs?

    Long-term care refers to a variety of care services (medical and non-medical) that helps meet the needs of people who have ... Read Full Answer >>
  2. When can catch-up contributions start?

    Most qualified retirement plans such as 401(k), 403(b) and SIMPLE 401(k) plans, as well as individual retirement accounts ... Read Full Answer >>
  3. Who can make catch-up contributions?

    Most common retirement plans such as 401(k) and 403(b) plans, as well as individual retirement accounts (IRAs) allow you ... Read Full Answer >>
  4. Can you have both a 401(k) and an IRA?

    Investors can have both a 401(k) and an individual retirement account (IRA) at the same time, and it is quite common to have ... Read Full Answer >>
  5. Are 401(k) contributions tax deductible?

    All contributions to qualified retirement plans such as 401(k)s reduce taxable income, which lowers the total taxes owed. ... Read Full Answer >>
  6. Are 401(k) rollovers taxable?

    401(k) rollovers are generally not taxable as long as the money goes into another qualifying plan, an individual retirement ... Read Full Answer >>

You May Also Like

Trading Center