For some people, Medicare Advantage (Part C) is a worthwhile alternative to original Medicare (Parts A and B) coverage.
Before buying a Medicare Advantage plan, it’s important to weigh the pros and cons.
Learn the factors to consider when exploring Medicare Advantage plans—and who you can talk to for expert advice.
Medicare Advantage, also called Medicare Part C, can be a great choice for getting more from your Medicare benefits. But it’s not right for everyone. In this article, we’ll explain how Medicare Advantage works—and walk you through the pros and cons of this comprehensive coverage option.
What's the difference between original Medicare (Parts A and B) and Medicare Advantage?
Original Medicare covers basic health care services like hospital stays (Part A) and doctor visits (Part B). It was the first type of Medicare program created by the federal government in 1965. To expand coverage to include prescription drugs, original Medicare can be combined with a Medicare Part D plan. Some people also add a Medigap plan (supplemental coverage) to cover the cost gaps in original Medicare.
Another way to receive your Medicare coverage is through a Medicare Advantage plan. This is a privately managed alternative to original Medicare. A Medicare Advantage plan covers all the services of original Medicare and usually includes Part D coverage as well. It may even offer extra benefits not covered by Parts A and B, such as dental, hearing, and vision coverage.
What is the benefit of having a Medicare Advantage plan?
There are five key advantages to choosing a Medicare Advantage plan compared to original Medicare only:
1. Lower costs
Although you must pay the Part B premium with both options, Medicare Advantage premiums are often less expensive (sometimes $0) compared to original Medicare combined with a Medigap policy.
In addition, Medicare Advantage plans have a maximum out-of-pocket spending limit for each policy period. In 2024, this cap is $8,850 for approved services. Once the cap is reached, no additional payments are required for covered services for the rest of the year. Original Medicare does not offer an out-of-pocket maximum, so your expenses could be much higher.
2. Similar to employer health insurance
If you're leaving a job where health insurance was offered, a Medicare Advantage plan will look similar. Deductibles, co-insurance, drug coverage, and physician networks (if you have an HMO plan) are all part of the package.
3. One plan instead of several
A Medicare Advantage plan is an “all in one” system. Often, you have only one insurance card to keep track of, not three. Some people prefer to deal with one plan versus the separate plans of original Medicare, Part D, and Medigap.
4. More coordinated care
HMO Medicare Advantage plans require you to have a primary care physician (PCP). They are the “gatekeeper” for all your care, responsible for making sure your team collaborates with other medical professionals on your treatment. For people with complicated health conditions, this kind of coordinated effort can be valuable.
5. Additional benefits (not covered by original Medicare)
Medicare Advantage plans often include prescription drug coverage, plus vision, hearing and dental benefits—all of which are not part of original Medicare. In some cases, an additional premium may be required, but that is not true for all plans.
What are the disadvantages of a Medicare Advantage plan?
There are four key disadvantages of choosing a Medicare Advantage plan versus original Medicare:
1. Getting coverage for procedures can be more complicated
Since managed care plans aim to keep health care costs within budget, they try to prevent overuse through various means—such as “prior authorization” requirements for surgery, home health care, hospital stays, and medical equipment. Doctors often must provide additional proof of necessity for a service before the plan will pay.
2. Billing before you receive treatment
With Medicare Advantage, copayments are paid prior to treatment. For multiple physician visits, there may be several copayments required upfront before you can see a doctor or receive care. In contrast, if you have original Medicare plus Medigap, you would owe a 20% coinsurance (billed after the service) that would be covered by your Medigap policy.
3. Less freedom in choosing health care providers
With original Medicare, you can see any physician who accepts Medicare, which gives you access to major medical centers nationwide. In contrast, Medicare Advantage plans are more restrictive in terms of provider networks. A network is a list of doctors, hospitals, and/or pharmacies that negotiate prices with insurance companies. In some areas, it can be difficult to find a local doctor or hospital that works with Medicare Advantage. And if you visit a doctor or visit a hospital that isn’t “in-network,” you will pay higher out-of-pocket costs.
4. Less compatible with other forms of retiree coverage
There are also some limitations in how Medicare Advantage works with other types of retiree coverage. For example, people with Tricare for Life need to enroll in original Medicare (versus Medicare Advantage) in order to keep the Tricare coverage. Prior to enrolling in a Medicare Advantage plan, be sure to find out how it will work with other retiree coverage you have.
Switching from Medicare Advantage to original Medicare
Switching between a Medicare Advantage plan and original Medicare is allowed once a year—during the annual Medicare Open Enrollment period from Oct. 15-Dec. 7. During this time, anyone with Medicare Advantage can switch to original Medicare.
In most states, anyone enrolled in a Medicare Advantage plan for more than one year is not likely to be able to enroll in a Medigap policy. If enrollment is possible, there may be additional guidelines to meet. Staying on a Medicare Advantage plan for more than one year and then trying to switch to original Medicare may result in limited (or nonexistent) Medigap choices. That's why it's important to take the time to read and discuss these options with a licensed Medicare benefits adviser.
Where's the best place to get advice on Medicare?
The good news is there are several ways to get impartial Medicare guidance from people who know the program inside and out. We’ve outlined some options below.
Medicare brokers that meet NCOA’s Standards of Excellence
NCOA can provide you information on licensed Medicare advisors who meet our strict Medicare Standards of Excellence (SOE). We’ve identified trustworthy Medicare brokers who have undergone rigorous training to ensure you can be confident in the enrollment choices you make. Best of all, talking to these certified advisors costs you nothing.
What does this mean for you, the consumer? It means our brokers:
- Will not pressure you into or attempt to steer you toward buying a specific Medicare plan
- Are highly trained and monitored to ensure quality service delivery
- Provide a broad range of plan options that meet your needs, not just the plans they represent
- Offer additional, free support for Medicare coverage issues
- Explain information in clear, easy-to-understand terms
- Offer their services in multiple languages, with accommodations for those who are hearing impaired
State Health Insurance Assistance Programs (SHIPs)
SHIPs offer free, impartial, and personalized insurance counseling and assistance to Medicare-eligible older adults, their families, and caregivers. They do not sell insurance products of any kind. These programs are available in all 50 states, Puerto Rico, Guam, D.C., and the U.S. Virgin Islands.
A certified SHIP counselor can help you:
- Learn the basics of Medicare, including who is eligible
- Review your options for health and/or prescription drug coverage
- Understand Medicare out-of-pocket costs as well as programs that can help you pay for these costs
- Ensure your rights are protected under Medicare
- Refer you to other agencies for additional help, if needed
These trained volunteers can also help you deal with Medicare billing problems and complaints about medical care or treatment. Find your local SHIP office here or call 1-877-839-2675.