How to Choose a Medicare Advantage Plan

How to Choose a Medicare Advantage Plan

So, you're approaching retirement. Even if you're not quite there yet, you still have some decisions to make, and one of the most important involves Medicare. Typically, Medicare covers about 80% of medical costs, and while that's a significant portion, there can still be a gap depending on your health care needs.

Many retirees choose to fill that gap with a Medicare Advantage plan. Let's walk through what this option can provide, who it's right for and how to choose a Medicare Advantage plan that fits your needs.

How Does Medicare Advantage Work?

At the age of 65, many retirees choose to opt into Medicare, which is a government-run health insurance program for older Americans. It includes Part A, which is hospital insurance, and Part B, which is medical insurance. Both of these parts together are referred to as Original Medicare.

Original Medicare doesn't always include costs like routine dental or eye exam procedures, so comprehensive insurance alternatives like Medicare Advantage can help cover that gap.

Medicare Advantage, also known as Medicare Part C, is run by approved private insurance companies that work in conjunction with the government. Essentially, it combines Original Medicare and supplemental insurance into one plan. Depending on the option you choose, you can also include Part D, which offers coverage for prescription drugs.

With Medicare Advantage, you're enrolled in the Medicare program, but the private insurance company that you choose administers your insurance.

The Pros and Cons of Medicare Advantage Plans

As with any insurance policy, there are always advantages and disadvantages, so it's essential to learn both before you make any final decisions.


Medicare Advantage plans offer some definite benefits, such as:

Lower Premiums

Compared to supplemental insurance policies, Medicare Advantage plans have very low or, in some cases, no monthly premiums. This option could present significant savings for someone who's healthy and rarely needs medical assistance.

Coordinated Care

Although Medicare Advantage has in-network requirements, that can be seen as a benefit because of the quality of care. All your doctors and specialists will need to communicate for referrals, so your medical files and information will be shared among them. This is helpful if you're working with a number of specialists.

Additional Benefits

Many Medicare Advantage policies offer added benefits like lifestyle coaching programs, which can help you manage your health. Others include caregiver or adult care support services. Depending on the option you choose, you could get additional coverage for other health services that are important to you. Some of these needs may not be covered under traditional plans.


Still, there are some potential drawbacks to Medicare Advantage, including:

More Limited Choices

If you're choosing Medicare Advantage, you should consider your network coverage. Most private insurers who offer Medicare Advantage operate through a health maintenance organization (HMO) or preferred provider organization (PPO) plan.

Depending on the plan you choose, network requirements might lead to you being limited to in-network doctors and specialists. If you want to see a specialist, you'll need a referral from your primary care physician. This can add another step to the process.

Additional Costs

Although Medicare Advantage policies have lower monthly premiums, they can also have higher out-of-pocket and deductible costs. Some of these can include copays and coinsurance for tests and treatments, both non-emergency and emergency. Depending on your health, those costs could add up to substantially more than what you'd be saving with a lower premium.


Many Medicare Advantage options are location-specific. You might not have coverage outside your home area, which could present problems if you have a vacation home in another state or plan to travel frequently during retirement.

What to Look for When Choosing a Medicare Advantage Plan

Before you make any decisions about whether or not to obtain a Medicare Advantage policy, you'll want to take a few things into consideration. Each of these factors can have a significant impact on your plan costs as well as your out-of-pocket expenses, so it's worth getting a better understanding.

Plan Networks

Most Medicare Advantage plans have specific in-network requirements. Check to see if your current primary care physician is covered under the private insurance you're considering.

If you need to see specialists or have underlying health conditions, confirm that those practitioners are covered, too. If they aren't, you might need to get a referral to see them under Medicare Advantage.

Prescription Drugs

Many Medicare Advantage policies also include options for prescription drug coverage, but some don't. If you take prescriptions, you'll want to pay close attention to how each option impacts your costs.

If you currently have several prescriptions, add up the costs you pay now and see how they compare under each plan and Medicare Part D. Also check if you can continue with the same branded medication or if you'll need to change to generic prescriptions.

Out-of-Pocket Costs

Out-of-pocket expenses can vary depending on the type of Medicare Advantage policy you choose. In some cases, a higher deductible means a lower monthly premium. However, if you frequently seek medical help, those costs could add up over time.

The same is true for copays for things like lab services, ambulance rides and hospital stays. Estimate how much these additional costs could run you each year to get a better sense of how much you can afford to pay out of pocket.

Quality of Care

The quality of care you'll receive on your Medicare Advantage plan can vary depending on the provider. The same is true if you need to leave a particular doctor or care provider you're comfortable with and switch to someone in-network.

Take the time to research different providers and find out not only how they coordinate with Medicare, but also how other policyholders rate the quality of care they receive.

Is Medicare Advantage Right for Me?

There are a lot of factors to consider when thinking about how to choose a Medicare Advantage plan. You'll want to look at your budget and retirement plans as well as your health and lifestyle choices. Once you have a better idea of how those factors impact your options, you'll feel more confident about choosing the plan that best fits your needs.

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