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Medicare Advantage appeals to many older adults, but it’s not always all it’s cracked up to be

In 2022, 48% of Medicare beneficiaries had been enrolled in Medicare Advantage plans as a substitute of Original Medicare, and specialists predict that quantity will likely be increased in 2023.

Medicare Advantage plans are supplied by personal insurers and bundle Medicare advantages in a approach many individuals discover interesting — however in addition they restrict care to community suppliers, usually require preapproval to see specialists and might saddle beneficiaries with excessive out-of-pocket prices for critical situations.

The variety of older adults in Medicare Advantage can be notable as a result of monetary specialists are inclined to suggest Original Medicare with medigap

“I help my clients with Medicare choices, and what I tell them all is that if you can afford it, you should sign up for traditional Medicare with a Medicare Supplement plan,” says David Haas, an authorized monetary planner in Franklin Lakes, New Jersey.

So why accomplish that many individuals flip to Medicare Advantage for his or her well being care in retirement? Here are the principle elements.

Medicare Advantage is usually free

In 2023, 66% of Medicare Advantage plans with prescription drug protection don’t have any premium — versus medigap, which has a month-to-month premium. If you haven’t any well being points, the selection can appear to be a no brainer.

“Medicare Advantage is extremely attractive when you’re healthy,” says Leslie T. Beck, a CFP in Rutherford, New Jersey. “But when something happens — and something always happens — and you’re in a Medicare Advantage plan, you can’t switch back. You can switch into regular Medicare, but you’ll never get a medigap policy.”

(This is as a result of in all however 4 states, when you’re previous your first 6-month Medigap open enrollment interval, you will need to medically qualify for a Medigap plan. Those with critical well being points might not be capable of get a plan.) 

Also see: $3,000 a week? The enormous cost of care for elderly loved ones that nobody warns you about.

Plans are bundled

With Original Medicare, individuals should juggle particular person items of protection — Part A, Part B, Part D, medigap — however Medicare Advantage affords one-and-done simplicity: There’s one premium for the whole lot. 

Although selecting a Medicare Advantage plan feels less complicated, it means you will need to store once more for protection each open enrollment. “You have to include the prescription drug coverage and the doctor coverage, and you have to make this choice every year,” Haas says. 

With Original Medicare, Haas says, “You do need to choose a new Part D plan, but you don’t need to reopen your entire medical equation every year the way you do with Medicare Advantage.”

Medicare Advantage affords extras

Many Medicare Advantage plans supply extra advantages, akin to cash towards dental or imaginative and prescient care, which isn’t lined by Original Medicare. About 1 in 4 individuals say further advantages pushed them to decide on Medicare Advantage, in accordance with a survey by the Commonwealth Fund, a well being care assume tank.

“Medicare Advantage plans are heavily marketed and tout how they include all of the other services not available with medigap — prescription drug plans, subsidized health club dues, dental and vision,” says George Gagliardi, a CFP in Lexington, Massachusetts. “So it seems to many people like too good of a deal to turn down.”

But the additional advantages supplied by Medicare Advantage are usually fairly restricted, and specialists say selecting a well being plan for the dental protection and fitness center membership is lacking the purpose of insurance coverage.

“It’s not about paying for the little piddly expenses that you have,” Beck says. “It’s paying for the catastrophic expenses.”

Their buddies selected Medicare Advantage

Many older adults select a Medicare Advantage plan as a result of somebody they know selected one.

“We tend to get a snowball effect,” says Andrew T. Cook, a CFP in Timonium, Maryland. “One retiree made the decision, they talk to another retiree, who talks to another one, and that groupthink often leads them to conclude that if they all made the decision independently, it must have been the right decision.” But Medicare is an space by which retirees ought to transcend buddies for recommendation. If a monetary planner isn’t an choice, every state has a State Health Insurance Assistance Program, or SHIP, the place individuals can get free, unbiased steering. Visit shiphelp.org to discover a program.

Also see: ‘My body was breaking down.’ This 75-year old was sick and overweight, and now she’s full of energy and a fitness influencer.

Medicare Advantage advertisements are in all places

“When you talk about advice on what’s better for individuals, it’s really whose voice is the loudest and the most persistent,” Beck says. “If you’ve ever watched any late-night TV, it’s just ad after ad for Medicare Advantage.”

Read extra: Confused by an avalanche of Medicare ads? Deceptive marketing has some experts calling for action.

In addition to being prolific, the advertisements are more and more deceptive. Growing complaints about Medicare Advantage promoting have led the Centers for Medicare & Medicaid Services to now require that insurers get approval from federal regulators earlier than airing tv advertisements.

“I watch those ads very carefully, and they basically conflate Medicare with Medicare Advantage,” Beck says. “It’s rare that they mention ‘Medicare Advantage.’”

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Kate Ashford, CSA® writes for NerdWallet. Email: [email protected] Twitter: @kateashford.



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