Now that open enrollment season is over we finally get a break from all those ads trying to convince you to enroll in a Medicare Advantage plan. Medicare Advantage, also called a Medicare Part C Plan, is an alternate to traditional Medicare. Advantage plans cover Parts A and B of Medicare and some plans include the prescription coverage under Part D. The Plans may offer low premiums or even zero premiums. The ads say they cover dental and vision costs, and can even give you rides to medical treatments or appointments. Seems like a great deal! But there can be hidden costs the ads will not mention.
All Medicare Advantage plans work with HMOs or PPOs.
Their benefits only work with health care providers who have signed up to be in their network. You should carefully review the list to make sure your doctors are included, or that there are replacement doctors you could accept. There is always the possibility that providers can opt out of the network down the road, requiring further switching. Also bear in mind that these are local networks and you may have no coverage if you get sick or have a fall while traveling, even in the US.
Medicare Advantage also has co-pays you should be aware of.
I recently reviewed a popular Florida plan from Humana which had the following out of pocket or co-pays:
- Hospital stay-$175 per day for the first ten days
- Diabetes supplies-up to 20% co-pay
- Diagnostic radiology-up to $125 co-pay
- Lab services-up to $100 co-pay
- Outpatient x-rays-up to $100 co-pay
- Therapeutic radiology-$35 or up to 20% co-pay
- Renal dialysis-20% of the cost.
This list is only a partial list of the more common types of expenses you could encounter. But it demonstrates that your out of pocket costs can quickly build up should you get sick. In fact the Medicare Advantage plans prefer the healthy enrollees and deliberately gear the payment structure to flush out sicker participants. But if you are enrolled in Medicare Advantage and need to switch due to an illness, in most cases you have to wait until that open enrollment period near the end of the year. Until then you will have to spend your assets to cover the costs of care.
There can also be a higher premium to pay for a Medigap policy than you would have paid if you signed up at your original eligibility date (65 for most).
If you are comparing traditional Medicare to a zero premium, the choice seems obvious for many: get Medicare Advantage!
And in many cases, for healthy people this may be an economical choice, until they get sick. The problem is no one knows when they will get sick and need the more complete coverage. This is the whole point of having insurance-protecting against a risk that may not happen this year.
The most comprehensive plan (with the fewest out-of-pocket costs) continues to be traditional Medicare, coupled with a Medicare supplement plan and a Part D prescription plan.
You will pay monthly premiums for this coverage:
- Most people who worked get Part A “free”“ because they had premiums deducted from pay.
- 2020 Part B is $144.10 for most people, usually deducted from your Social Security payment
- Medicare supplements vary widely, but you can expect $200-$400 or so monthly
- Part D plans 2020 expect to pay around $40-$60
But in the end you do have coverage you can count on if you get sick.
If you would like to research more on your own, the regulations governing Medicare Advantage are found at 42 CFR Part 422.