Medicare Advantage Plans: What They Are & Why You Might Want One

One might think that things will get easier in retirement, but alas, Medicare isn’t as simple as one might think. In fact, signing up for Medicare can be incredibly confusing. The last thing you want is to be stuck with unpayable medical bills.

Maybe you’ve heard about “Medicare Advantage” or “Medicare Part C,” but you wonder what it is exactly. Understanding this option is crucial when it comes to getting the coverage you need.

Medicare Part C

Original Medicare

With a standard, original Medicare plan, Part A is essentially hospital insurance. If you end up admitted to a hospital, Part A is what covers your stay. There is an initial deductible, however. Additionally, if you’re hospitalized for an extended period, you could end up owing hundreds per day out-of-pocket.

Part B has a monthly premium, but it covers things like doctor visits, tests, and medical supplies. It has an incredibly low deductible, but you also still have to pay 20% of your costs.

There are limits to what is covered by Original Medicare, which means you could be stuck with some hefty bills. Original Medicare also does not cover prescription drugs either, you’ll need Part D to cover that.

Medicare Advantage Plans

While you can stick with Original Medicare, an Advantage Plan will often give you far more coverage. These plans are not managed by the federal government, but rather by private insurers. You’ll still get the benefits of Part A and Part B with an Advantage Plan. You’ll also be entitled to whatever further benefits your Advantage Plan offers.

These plans work similarly to traditional insurance policies. You can choose a plan that has the features you specifically want. Some Advantage Plans include dental, hearing, and vision as well. Of course, you’ll have to select something that fits your budget.

Types of Plans

There are several types of Advantage Plans, many of which may likely sound pretty familiar. They include HMO (Health Maintenance Plans) and PPO (Preferred Provider Organization) plans, same as with standard health insurance. There are also Special Needs Plans that are designed for people with chronic medical conditions. Additionally, there are HMO Point-of-Service Plans and Medical Savings Accounts.

All Advantage Plans include the same coverage you’re entitled to through Medicare Part A and Part B. In other words, you don’t have to worry about receiving those benefits.

The major advantage to aptly titled Advantage Plans is that they all include annual out-of-pocket maximums. This is what makes them so great – if you fall seriously ill, it comes in quite handy. Once your maximum is reached, the plan will cover 100 percent of the costs for the remainder of the year.