Heading into retirement brings with it a handful of important decisions, including what to do about your health insurance. Medicare, open to seniors at age 65 and other people with certain disabilities, offers low-cost healthcare coverage to the nation’s elderly population. But within Medicare, you’ve got choices to make. The first is whether to choose original Medicare (Parts A and B, which is managed and administered by the federal government) or Medicare Advantage, the private portion of Medicare that’s sold and administered through individual insurers.
There are plenty of reasons to choose one or the other, and your choice will come down to what you need in a healthcare plan. But aside from the obvious benefits of Medicare Advantage, there may be some surprising features that make it a more attractive and viable option for you.
Main Benefits of Medicare Advantage
Medicare Advantage (MA) is sold by private insurers, and by law, it must cover at least the same benefits as original Medicare. This comprises Parts A and B, which are hospital and medical coverage, respectively. If you choose Medicare Advantage over traditional Medicare, you’ll benefit from:
- The convenience of having an all-in-one healthcare package since many MA plans include drug benefits along with hospital and medical coverage;
- A yearly cap on out-of-pocket spending (original Medicare has no such cap); and
- Fixed copay or coinsurance amounts for different services, compared to original Medicare, which covers about 80 percent of medical services and requires beneficiaries to cover the rest out of pocket – without a cap in place.
Depending on the plan you choose, MA coverage may also provide vision, dental and prescription drug benefits. These services aren’t covered by original Medicare. You can buy a Part D drug plan as a separate policy with original Medicare, but prescription drug benefits aren’t automatically included. Vision and dental are also excluded from original Medicare.
Unexpected Part C Benefits
Medicare Advantage, also referred to as Part C, offers a number of other benefits in addition to the standard ones outlined above. Because these plans are sold by private companies, they can be more flexible in what they cover and cost. When you’re shopping for MA plans, read the list of benefits carefully and ask questions. If you need a lot of medical care, or added benefits are important to you, then MA plans make good economic sense. Here are some benefits of Medicare Advantage that you might not know about.
Plan variety
As mentioned, MA plans come in all shapes and sizes, much like the health insurance that you might be used to under an employer or through the private marketplace. For example, you can find PPO plans, which have advantages for seeing doctors inside a network, or HMO plans, which have more restrictions but cost less. You may also find plans that cover benefits that you need, like vision or hearing aids, and your premium for these plans might also be low or even zero. You’ll still need to pay for Part B, but MA plans themselves sometimes offer $0 premiums.
Travel coverage
In general, Medicare Advantage plans require members to use local networks of healthcare providers. This can make it difficult to travel since any non-emergency medical care needed on a trip would be considered out of network and would cost more. However, you can find plans that include a travel benefit. If you’re a frequent traveler, it’s possible to find one that will provide coverage even if you’re on the road. Note that this is typically an advantage that original Medicare has over MA plans since original Medicare is accepted more widely and can be used wherever you are as long as the provider accepts the coverage.
Wellness and prevention services
Some insurance providers offer MA plans that cover wellness programs and prevention services. This might include a free membership for a fitness program or gym along with free nutrition and wellness classes. Online tools to keep track of calories and exercise are also typical perks provided to members. Why would MA providers offer these types of services for free? In the long run, it saves insurance companies money when chronic illnesses are caught early, before complications can arise. Some of these savings are passed on to you in the form of affordable premiums and added wellness benefits.
Nursing home and/or assisted living benefits
Another option not offered under original Medicare is coverage for assisted living facilities and nursing homes. Fortunately, there are Medicare Advantage plans that include this type of care. If you anticipate needing this benefit, you might consider one of the plans that offer coverage. MA plans don’t factor in the age or health status of enrollees when they first become eligible for Medicare. Because of this, you could receive benefits that would make up for any increase in the monthly premium.
Improving Your Quality of Life
One intangible benefit of Medicare Advantage relates to health and wellness during the senior years. In later stages of life, choosing a plan that includes dental, vision and hearing benefits could improve your overall satisfaction and quality of life. Depending on your finances, adding coverage for these most common Medicare Advantage benefits may be a wise decision. Statistics show that:
- Thirty percent of seniors on original Medicare for more than five years have not had an eye exam during that time.
- For seniors over 70 years old, 55 to 79 percent have hearing problems (this figure increases with age).
- Almost a third of seniors over age 65 have untreated cavities.
Each individual or couple should carefully evaluate the premiums, coverage networks and benefits of the many MA plans available to seniors. There isn’t a one-size-fits-all plan, no matter which option you choose. Once you do your homework, you’ll be able to choose the plan that best fits your needs.