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Medicare Advantage Plans: What Are They and When Should You Buy One?

In the past decade, enrollment in Medicare Advantage has nearly doubled and is expected to rise to 47% by 2029. In 2019, one-third of Medicare beneficiaries (a total of 22 million) reportedly opted for a Medicare Advantage plan. Needless to say, this coverage, while relatively new, is slowly dominating the health marketplace and shows no signs of slowing down. 

What is this new Medicare plan, and should you consider enrolling? If you’re one of the many beneficiaries that are curious about this new coverage, read on to learn what this plan entails and if you can benefit from it today. 

What is Medicare Advantage?

If you’re familiar with the Original Medicare, you already have a pretty good idea of what this insurance entails. Medicare Advantage, also known as Medicare Part C, is similar to Medicare Part A (hospital insurance) and Part B (medical insurance), except it’s offered by private, approved providers as an “All-In-One” alternative.

How it Works

Anyone can enroll in a Medicare Advantage plan as long as they’re eligible for, or already have Part A and Part B coverage. Similar to the ‘Original Medicare,’ you must be:

  • Aged 65+ or have a disability
  • Be an American citizen or a permanent legal resident of at least 5 years 

 Unfortunately, If you have an end-stage renal disease (a condition that requires dialysis treatment or a kidney transplant), you may not qualify for most Part C plans. 

An excellent alternative for ineligible candidates is a type of Medicare insurance called a Special Needs Plan (SNP). It’s specifically designed for ESRD patients and similar cases.

As private companies offer Medicare Advantage, the availability is regional and not national. You’ll need to check whether you can get a plan in your area.

When Should I Enrol?

If you’re approaching retirement, it’s best to sign up during the enrollment period closest to your 65th birthday. If you manage to do this at least three months before, you’ll have coverage by the time you’re 65.

However, missing the initial enrollment window altogether means you might have to wait until Medicare’s general enrollment period (usually January 1st to March 31st each year). In effect, this means more delays and even potential penalties.

If you already have qualifying coverage, the above might not apply. Rather give yourself enough time to find out, choose a suitable plan, and sign up. The last thing you want is to be without health insurance while waiting for your coverage to kick in.

Costs and Services

While it may be similar to Original Medicare, not all Medicare Advantage plans are the same. Out-of-pocket costs, premiums, and rules will depend on the type of policy you choose and the provider. Examples of variations are networks and whether you need a referral to see a specialist. 

What Does it Cover? 

While the Original Medicare only covers medical and hospital costs, Part C combines Parts A and B, and many plans also come with additional benefits like:

  • Dental
  • Vision
  • Hearing
  • Prescription drugs (Plan D)

Moreover, Plan C eliminates the need for Medigap, which supplements healthcare services and supplies not offered in Part A or B. Instead of paying for two separate plans, Part C is offered as a bundle by approved private companies. Usually, it’s at a lower cost and with more coverage included. 

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Should I Enroll For Medicare Advantage?

How do you know if this plan is right for you? Let’s weigh up the pros and cons.

Pros

Additional Coverage

Medicare Advantage plans cover what the Original Medicare won’t. This means you don’t have to pay for Medigap or other supplemental health care policies to make up for the lack of hearing, vision, dental, or drug coverage. However, the precise extent of benefits depends on the insurance provider.

Fixed Cost

Original Medicare requires you to pay a percentage of the coinsurance. On the other hand, most Medicare Advantage plans use copays for flat rates. 

Accepted Abroad

If you need health insurance outside of the US, Medicare Advantage is ideal. Unlike many plans, it gives you the option to receive coverage abroad.  

Cons

Fixed Network

Original Medicare grants you leeway to obtain medical treatment or services from anywhere that accepts the plan. With Medicare Advantage, you have to stick to your network.

More Difficult To Shop and Compare

With so many different Medicare Advantage plans, it can be challenging to sit down and compare them all individually. Whatever you choose, make sure that it fulfills your needs and suits your pocket.

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The Bottom Line

Most people want to find the best coverage that offers the most services for less. While there’s no “one-size-fits-all,” Medicare Advantage comes with the flexibility to choose an all-inclusive plan. 

You can find a plan that includes coverage for extras like dental, hearing, vision, and even prescription drugs (Part D). Premiums also tend to be lower, but this depends on the insurance company.

Give yourself enough time to compare your options. If you decide that Medicare Advantage fits the bill, try and sign up as soon as possible before your 65th birthday.

Find a plan that suits your lifestyle and your wallet. While you do the math, keep in mind that your health comes first. 

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