You've no doubt heard of Medicare Advantage -- but does it pay
to sign up for it?
Maurie
Backman Oct 8, 2019 at 6:36AM
Healthcare is always a hot topic, both for
investors and for those who need health coverage. With Medicare's open
enrollment period quickly approaching, millions of seniors will soon find it's
time to elect their coverage for the upcoming year. If you're used to original Medicare, you may be gearing up to
choose your Part D plan and brace for the possibility of a Part B premium
increase. But there may be a better option to consider -- a Medicare Advantage
plan.
Medicare Advantage is an alternative to
traditional Medicare that serves as your all-in-one health plan (as opposed to
original Medicare, which consists of several distinct parts). It may help to
liken Medicare Advantage to the health insurance you had during your working
years, where you're entitled to certain benefits that can vary based on the
plan you choose. Each Medicare Advantage plan sets its own rules but must
provide at least the same level of coverage as original Medicare. But there are
certain benefits to choosing an Advantage plan that you should know about.
1. A wider scope of
coverage
Original Medicare doesn't cover a number of
important services for seniors, like dental care, hearing aids, and vision
checks and eyewear. One major perk of Medicare Advantage is that these
services are typically covered, which means you won't need to
pay for them completely out of pocket. Some Advantage plans offer additional
perks like wellness programs and nurse hotlines, which give you perpetual
access to care.
2. Lower premiums
You'd think that a wider scope of coverage would
translate into added costs for you under Medicare Advantage, but that may not
be the case. In fact, you'll often pay a lower premium for Advantage than you
will for Part B under original Medicare. And in some cases, you can even snag a
zero-premium plan. Furthermore, whereas you'll be on the hook for deductibles under traditional Medicare,
some Advantage plans are deductible-free.
3. Maximum
out-of-pocket limits
With original Medicare, it's hard to know how
much money you'll spend on healthcare each year. If you wind up needing a lot
of services or several hospital stays, your costs could easily skyrocket. One
major benefit of Medicare Advantage is that it sets a limit for what you'll be required
to spend for your healthcare. Once you hit that limit, you won't pay anything
for covered medical services until a new year kicks off.
4. Coverage overseas
Original Medicare doesn't offer overseas
coverage, which often proves problematic for seniors who travel abroad
frequently. Some Advantage plans, on the other hand, do over
health coverage outside U.S. soil.
But beware the
drawbacks, too
Though there are plenty of good reasons to
choose Medicare Advantage over traditional Medicare, you should be aware that
with Advantage, you're limited to what could be a somewhat narrow network of
providers. Go out of network, and your Advantage plan most likely won't pick up
the tab for the costs you incur. Original Medicare, on the other hand, is a
nationwide program and as such has an extensive number of providers for you to
choose from. That's a good thing if you tend to travel domestically or split
your time between two parts of the country.
Also, be aware that not all Advantage plans are
created equal. You'll need to explore your options and see if there's a
specific Advantage plan that makes sense for you.
If you do decide to move over
to a Medicare Advantage plan, you can do so during Medicare's upcoming open
enrollment period. It runs from Oct. 15 through Dec. 7 each year. Furthermore,
if you sign up for an Advantage plan during open enrollment and wind up unhappy
with your choice, you can switch from one Advantage plan to another during the
Medicare Advantage open enrollment period of Jan. 1 through March 31, or even
revert back to original Medicare if you decide that's the right way to go.
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