What You Need to Know About Medicare Advantage Plans

If your 65th birthday is coming up—or if you’re receiving Social Security Disability payments and are about to qualify for Medicare before age 65—you may be wondering exactly what comes next.¹ Below, we discuss some highlights of Medicare Advantage Plans and what you should know before signing up.

What are Medicare Advantage Plans?

Medicare has two parts: A and B. Part A includes hospital coverage, which may pay the costs associated with an ER visit, an inpatient stay, or a short stay at a rehabilitation center. Part B includes medical coverage, which may cover doctor’s appointments and other outpatient medical costs.²Together, Parts A and B are often referred to as Original Medicare.

Original Medicare doesn’t cover everything. Costs associated with prescription drugs, hearing aids, or dental or vision expenses may fall outside the Medicare plan. That’s where a Medicare Advantage plan comes in.

These plans are offered by private insurers and offer extra coverage than just Original Medicare. These plans (sometimes called Medicare Part C) must follow all the rules and offer all the benefits associated with Original Medicare but can also offer prescription drug coverage, dental and vision coverage, and other coverage options you may need.

What Should You Know Before Signing Up?

The decision whether to enroll in Original Medicare or a Medicare Advantage plan can be a highly individual one. There’s no one-size-fits-all approach; the right plan for you depends on your health history, your retirement plans (as Original Medicare may not cover overseas travel), and your medical budget, among other factors.

A few important facts include:

Medicare Advantage plans aren’t allowed to charge more than Original Medicare for some services (including chemotherapy and dialysis).
Medicare Advantage plans may have hefty discounts for in-network providers; check to see whether your providers are in-network before you enroll in a particular plan.
Medicare Advantage plans, like many other traditional health insurance plans, place a cap on your annual out-of-pocket costs. Once you reach this OOP limit, you may no longer be responsible for any expenses you incur during the plan year. However, this limit may be high, so it’s often a good idea to budget this OOP amount when considering the overall cost of healthcare.

If you’re still not sure what plan is right for you, consider reaching out to an insurance agent. These agents are familiar with the ins and outs of Medicare Advantage plans and may help you drill down into the key plan elements you need.