Medicare vs. Medicare Advantage: How to Choose

Should you opt for government-offered Medicare or go with a “Medicare Part C” alternative?


You should think twice before going with Medicare Advantage if....

  • You want the broadest possible choice in doctors and other medical providers. More doctors and other providers accept original Medicare than private Medicare Advantage insurance. Private plans tend to be restricted to a home network, like a HMO doctor network. If you travel frequently, you may want to consider staying with original Medicare for this reason.
  • You can't afford or don't want to pay additional monthly premiums. Medicare Advantage plans, like other private health plans, typically charge premiums; the average was about $30 a month for an HMO and $32 to $64 for a PPO, according to the Kaiser foundation. Again, these premiums don't include your Part B premium of about $105 per month in 2013 (or higher if you are high-income).
  • You want maximum flexibility when seeking medical specialists. Under original Medicare, you don't need prior authorization from a primary-care doctor to see a specialist, whereas Medicare Advantage plans that are designated HMO's could require you to see a primary-care doctor first. PPO plans would allow you to see a specialist without a referral, but seeing a out-of-network doctor or specialist would cost you more. Most Medicare Advantage plans are either HMO's or PPO's.
  • You're still employed and covered by your employer. You might end up paying an unnecessary premium for Medicare Advantage or could lose your employer-provided coverage. Check with your Human Resources department and the Social Security Administration for specifics.
  • You have employer-sponsored retiree health benefits that supplement original Medicare. These benefits wouldn't help with Medicare Advantage, so check with your Human Resources department before signing on a Medicare Advantage plan.
  • You qualify for Medicaid or a Medicare Savings Program. Low-income Medicare beneficiaries have other options and should contact their state Medicaid office.
  • Comparing costs. Medicare Advantage plans differ greatly on how much they pay for different services. To get a handle on the pros and cons of any plans you're considering, try to estimate which medical services you may need in the coming year—and what they'd cost under each plan's terms. To give an idea of typical medical needs, here are statistics compiled by Kaiser on Medicare patients for 2006:

    • More than eight in 10 saw a doctor, with a median six visits per patient in a year.
    • One in five were hospitalized that year.
    • Three in 10 went to the emergency room at least once.
    • Less than one in 10 (8 percent) used home health services. The median number of visits was 17.
    • If you decide to buy a Medicare Advantage plan, you must enroll between October 15 and December 7—the period known as open enrollment—in order for your coverage to start the first of the following year. (Original Medicare has its own separate enrollment periods, for seniors who aren't automatically enrolled.) Because of government regulation, Medicare Advantage premiums are not influenced by age, health status, or the method by which a consumer signs up (through an insurance agent, for example, or directly through an insurer). Monthly cost—and plan availability—does vary from county to county. For 2013, the average person has about 20 plans to choose from, according to the Kaiser foundation.

      [Read Medicare Open Enrollment Tips for 2013]

      Select resources on Medicare and Medicare Advantage

      • Medicare Advantage plans are rated by the federal government on a scale from one to five stars based on the quality and accessibility of care, consumer satisfaction surveys, and other measures. Plans are given bonus government funding if they earn three or more stars. The star ratings are the only national, official grading system for Medicare Advantage plans.
      • Guide to Medicare by the Kaiser Family Foundation. Kaiser is a nonprofit, nonpartisan research organization that focuses on health care issues.
      • SHIP counselors are State Health Insurance Assistance Program workers who offer free information on local health care options.

      • Corrected on : Updated on 12/5/12

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