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As Medicare Advantage plans increase in popularity, it pays for consumers to understand their coverage options

Medicareresources.org offers insights, consumer tips for comparing coverage during Medicare open enrollment, which ends Dec. 7

November 16, 2022

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Minneapolis – Enrollment in Medicare Advantage plans continues to rise, and medicareresources.org today offers insights into the growing popularity of the plans and tips for choosing coverage during Medicare open enrollment.

Medicare open enrollment – also known as the annual election period – is currently underway and closes Dec. 7.

“Medicare Advantage plans are growing in popularity because they are very good at communicating with consumers and offering benefits like dental, vision and hearing care that attract interest,” said Jenny Chumbley Hogue, an analyst for medicareresources.org. “Ultimately, the choice is one that deserves careful consideration each year. A plan that appears attractive at first glance could end up costing you more down the road if it’s not the right plan for your needs. The devil is always in the details.”

In 2022, 28.4 million Americans were enrolled in Medicare Advantage plans – 48% of all Medicare beneficiaries. That’s more than double the percentage enrolled in 2007. The Congressional Budget Office projects that by 2032, 61% of Medicare beneficiaries will be enrolled in Medicare Advantage plans.

During Medicare open enrollment, Medicare beneficiaries who are already enrolled in Medicare coverage have a handful of decisions regarding their coverage. Options include:

  • Switching from Original Medicare to Medicare Advantage, or vice versa.
  • Switching from one Medicare Advantage plan to another.
  • Switching from one Part D plan to another.

“As with many consumer decisions, there are trade-offs depending on which option you choose,” said Chumbley Hogue. “Advantage plans tend to have a more limited provider network, and coverage for specific services may not be as robust as you can get with Original Medicare plus supplemental coverage. But Advantage plans also tend to be less expensive.

“On the other hand, if you are enrolled in Original Medicare and have supplemental coverage through Medigap and a stand-alone Part D drug coverage, that could end up saving you money in the long run if you develop a serious or chronic health condition. It’s important to know your options and to make a thoughtful selection.”

How to decide between Original Medicare and Medicare Advantage

Medicareresources.org suggests consumers take into consideration several factors when deciding between Original Medicare and Medicare Advantage:

  • Provider network: Original Medicare has a broader provider network with nationwide coverage. Medicare Advantage plans each have their own network, which may be more limited in terms of providers and coverage area.
  • Plan availability: While Original Medicare is available to all Medicare-eligible consumers, there are some areas of the country – mostly rural areas in the western part of the country – where there are no Medicare Advantage plans sold.
  • Travel: If you plan to travel, keep in mind that Original Medicare doesn’t cover medical expenses incurred during foreign travel except for a few rare circumstances. Medigap plans, which provide supplemental coverage for Original Medicare enrollees, provide some coverage of medical expenses for enrollees traveling internationally. With Medicare Advantage, health coverage during domestic and foreign travel varies. Medicare Advantage plans offer nationwide emergency room coverage at any hospital that accepts Medicare.
  • Premiums: The average total of premiums for Medicare Advantage (including the Part B premium – which is paid by Medicare Advantage enrollees) is less than the average total of premiums for Original Medicare plus Medigap and Part D prescription coverage.
  • Out-of-pocket costs: Original Medicare coupled with Medigap coverage may come at a higher monthly premium, but could result in little to no out-of-pocket exposure (other than the cost of medications, which are covered separately under Part D). With most Medicare Advantage plans, you’ll pay coinsurance and copays that could total as much as $8,300in 2023 for services that would be covered under Original Medicare with Part A and B (plus the cost of medications).
  • Prescription drug costs: Most Medicare Advantage plans include Medicare Part D drug coverage, but if you’re considering an Advantage plan, you should check it to make sure. Each Medicare Advantage plan will also have its own preferred drug list, which determines how much you pay for your prescriptions. If you stick with Original Medicare, you will need to shop for a stand-alone Part D plan if you need prescription drug coverage. These plans are offered by private-sector carriers and the cost and benefits will vary from one plan to another.
  • Extra benefits: Medicare Advantage plans often offer extra benefits – like dental, vision, hearing aids, and gym memberships – that are not offered by Original Medicare.

Consumers should also consider their ability to change their Medicare coverage later on.

“If the ability to easily switch back and forth among plans is important to you, a Medicare Advantage plan offers that flexibility,” Chumbley Hogue says. “On the other hand, your ability to switch from Medicare Advantage altogether (and enroll in Original Medicare plus Medigap) could be hindered by your medical history. That’s because enrollees who have had Medicare Advantage coverage for more than a year no longer have guaranteed issue for Medigap coverage.”

There are also special considerations that may impact your plan selection. People with certain health conditions or applicants with low incomes may be eligible for special types of Medicare Advantage plans. That may be a factor as you compare the costs and benefits of Medicare Advantage and Original Medicare.

If you are under 65 and eligible for Medicare due to a disability, you can enroll in any Medicare Advantage plan that’s available in your area. If you select Original Medicare instead, you may or may not have access to Medigap coverage, as eligibility rules vary considerably from one state to another.

But once you turn 65, you’ll have an opportunity to select from among any of the available Medigap plans during your initial enrollment period (IEP). During your IEP, Medigap coverage is guaranteed issue.

Choosing between Medicare Advantage plans

Medicareresources.org also encourages consumers who are enrolled in a Medicare Advantage plan to evaluate their coverage each year to ensure they have a plan that still meets their needs.

“As with all private health insurance plans, offerings change from year to year, and from area to area,” Chumbley Hogue says. “Insurance carriers may enter or exit different markets. They may also adjust plan costs, their provider network, covered prescriptions or their covered benefits.”

Here’s how to evaluate your existing Medicare Advantage coverage during Medicare open enrollment:

  • Check whether your preferred providers are still in-network.
  • Review whether your prescription drug costs change in the upcoming plan year, and always check multiple pharmacies to determine the right plan for you.
  • Consider all of the available Medicare Advantage plans – comparing premiums, provider networks, and prescription drug costs.

“You really need to pay close attention to the details when you’re assessing Medicare Advantage plans,” said Chumbley Hogue. “Read the fine print, and reassess your plan each year to make sure you understand your plan costs and your plan benefits. Just because a plan was a good fit when you first selected it, it doesn’t mean it will continue to be a good fit. Plans change all of the time, and so do our health needs. This is not a one-and-done process.”

You can find additional information about Medicare open enrollment in the Medicare Open Enrollment 2023 Guide.

Medicareresources.org is one of the longest running online sources of in-depth information about Medicare. The site provides an overview of the basics of Medicare coverage options enrollment and eligibility; coverage FAQs; state-specific Medicare information; and a glossary of Medicare terms.The medicareresources.org website is owned and operated by Healthinsurance.org, LLC.


Contact:

Amy Fletcher Faircloth, [email protected]

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