Key Takeaways

  • With the Medicare Annual Enrollment Period underway, now is the perfect time to review your health care needs for 2023. 

  • One option to consider is a Medicare Advantage (MA) plan, which offers an alternative way to get your health and prescription drug coverage.

  • We’ve outlined the three main benefits of MA to help you make a smart, informed choice about your Medicare plan.

Each year, October 15 through December 7 marks the Medicare Annual Enrollment Period (AEP)—a time for choosing or changing your Medicare coverage. If you’ve already turned 65, or you’re within three months of turning 65, now is a good opportunity to consider your personal health care needs and compare the different Medicare coverage options available.

During the Annual Enrollment Period, you can sign up for Original Medicare, which is coverage provided and managed by the federal government. Original Medicare includes Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance). You can also enroll in Medicare Part D (prescription drug coverage), a plan offered through private insurance carriers. 

Another option available to you during the Annual Enrollment Period is Medicare Part C, also known as Medicare Advantage (MA). Like Medicare Part D, MA plans are provided by private insurers.

Are Medicare Advantage plans worth it?

With so much information out there about Medicare Advantage plans, it can be hard to distinguish fact from fiction. MA plans are not for everyone, but they do offer important benefits not available with Original Medicare. The key advantages of MA plans boil down to the “three Cs:” cost, coverage, and convenience. We review each of these below. Keep in mind that your decision should be based on your individual health needs and budget.

The “3 Cs” of Medicare Advantage

Key Benefit #1: COST
There’s a limit on how much you’ll pay out of your own pocket for health care services each year.

An out-of-pocket (OOP) cost is the amount you’ll pay beyond what Medicare covers. You are responsible for part of your medical bill after Medicare kicks in to pay their share. One major benefit of Medicare Advantage plans is that they place a cap on your out-of-pocket costs for the plan coverage year. Original Medicare (Parts A and B) does not.

Why is an OOP maximum so valuable? When it comes to health care costs, predictability is important — especially if you’re living on a fixed or low income. You want to know you won’t be required to pay more than a certain amount out of your own budget for your health care.

“What a person will pay in out-of-pocket costs in 2023 will vary based on the coverage they select, which providers they visit, meaning primary care providers versus specialists and in-network versus out-of-network, and the services they receive,” said Christopher Ciano, president of Medicare for Aetna.

Out-of-pocket expenses can change every year so it’s really important to check the plan’s details each year before you enroll,” Ciano said.

In 2023, the out-of-pocket maximum for Part C plans is $8,300 for in-network services and $12,450 for in-network and out-of-network services combined. However, individual MA plans can set lower limits if they wish. Once you reach the OOP limit, your MA plan pays 100% of covered health services for the rest of the calendar year.

Key Benefit #2: COVERAGE
You receive more personalized health care coverage that’s tailored to your specific needs.

Like Original Medicare, Medicare Advantage plans cover hospital services and doctor visits. However, they also can provide health-related benefits not available with Original Medicare, such as coverage for:

  • Vision / eyeglasses
  • Hearing / hearing aids
  • Dental
  • Fitness club memberships
  • Medically necessary transportation

It's important to understand that not all Medicare Advantage (MA) plans offer all of these benefits. Also, the type and level of coverage vary by plan. Some MA plans may limit these benefits to people with certain conditions.

A recent survey by Medical Economics found that today's older adults want more from their Medicare plan than just basic coverages. In fact, 91% of respondents said extra benefits like gym memberships and hearing aids are important to them, while nearly 40% stated they value mental health programs and resources.1

Some MA plans also offer non-medical benefits to (also called supplemental benefits) to support multiple aspects of your health, security, and emotional well-being. These can include:

  • Debit cards to purchase healthy foods
  • Allowances to buy over-the-counter-items
  • Help paying utility bills
  • Access to brain games and exercises for good mental health

The type and level of coverage vary in MA plans that provide these and other non-medical benefits.

By balancing your primary medical needs with other aspects of your wellness, MA plans can help you live a functional and independent life for longer.

Key Benefit #3: CONVENIENCE
You can combine your medical and prescription drug coverage into one convenient health insurance plan.

Many Medicare Advantage plans include prescription drug coverage. This means you don’t have to purchase a separate Part D plan and pay a separate premium. With MA, you can enjoy the ease and convenience of having your hospital, medical, and prescription drug coverage rolled up into a single plan. 

What to keep in mind when choosing an MA plan

Here are two important things to know if you do choose to enroll in a Medicare Advantage plan:

  • You may be limited in what providers you can see: Some MA plans require you to see in-network doctors to access full plan benefits. Other plans may allow you to visit out-of-network providers, but you may pay more for those services. The scope of the provider network depends on the type of Medicare Advantage plan you choose.
  • You may have to pay an additional monthly premium: You can only choose a Medicare Advantage plan after you enroll in both Medicare Part A and Medicare Part B. Although there is rarely a monthly premium for Part A, Part B has a standard plan premium of $164.90 for 2023 (Social Security will tell you the exact premium you’ll pay). If you sign up for an MA plan, you’ll typically pay a monthly premium for medical and prescription coverage plus the Medicare Part B premium. For 2023, the Centers for Medicare & Medicaid Services project the average monthly MA plan premium to be $18—a reduction from last year. However, some Medicare insurers, like Aetna, offer $0 monthly premium MA plan options for your consideration.

Most Medicare Advantage plans also include a deductible and some copay and coinsurance costs for additional benefits coverage.

The bottom line: It's worth exploring all of your Medicare options

Rather than focusing on hospital and medical benefits like Original Medicare, Medicare Advantage plans often take a more holistic approach. If you prefer more comprehensive, all-in-one coverage—and the protection afforded by an out-of-pocket maximum—an MA plan may be an option worth exploring.

This content was developed in partnership with Aetna. Learn more about what you need to know about Medicare.

Sources

1. Seniors expecting more from their Medicare plans than just basic care, Medical Economics. Found on the internet at https://www.medicaleconomics.com/view/seniors-expecting-more-from-their-medicare-plans-than-just-basic-care