Medicare Advantage Plans: Great Deal or Hidden Risk?

If you’re eligible to sign up for Medicare, you have choices: You can stick with original Medicare and buy a separate Part D drug plan, or you can sign up for a Medicare Advantage plan instead.

Medicare Advantage plans are offered by private insurers and have to offer at least the same level of coverage as original Medicare. But these plans often seem like a great deal because they commonly offer benefits beyond what original Medicare covers, including dental care, eye exams, hearing aids, and even gym memberships in some cases.

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There can also be cost savings associated with Medicare Advantage. That’s because these plans put a cap on annual spending, whereas original Medicare does not. But while Medicare Advantage could be a great deal for some people, there are some pitfalls associated with these plans you should know about.

The pros don’t always outweigh the cons

When you’re retired and living on a fixed income, predictability matters. A lot of retirees don’t have much income other than their monthly Social Security checks. The fact that Medicare Advantage plans cap annual out-of-pocket spending can therefore be huge.

Plus, the extra benefits offered by Medicare Advantage plans can result in big savings. Some of those supplemental benefits could also greatly improve your quality of life.

But there are trade-offs to be aware of. To keep costs down, Medicare Advantage plans rely on provider networks. If your preferred providers aren’t in your plan’s network, you could face very high costs if you want to continue using them.

Also, it’s common for Medicare Advantage plans to require prior authorization for procedures or treatments that are on the costlier side. This doesn’t mean that you’ll be denied such treatments. But you may have to wait longer to get access to the care you need, which could be a detriment to your quality of life.

It’s a matter of priorities

With Medicare Advantage, you get the benefits of predictable costs in the context of annual out-of-pocket expenses and, in most cases, added services beyond what original Medicare covers. But that doesn’t mean you should be willing to give up provider choice and flexibility.

If you have complex medical needs, original Medicare could end up being a better choice, as you may have access to more providers. And if you pair original Medicare with a Medigap plan, you may find that your out-of-pocket spending is manageable.

All told, choosing Medicare Advantage over original Medicare is a matter of what you prioritize. But the good news is that if you give Medicare Advantage a try and it doesn’t work out, you’re not stuck with your plan forever.

Despite its flaws, Medicare Advantage could be a good fit based on your financial situation and health-related needs. So it’s worth at least exploring plan choices in your area to see what’s available.