ORIGINAL MEDICARE IS A TRADITIONAL fee-for-service program that allows seniors to get treatment from any hospital or doctor that accepts Medicare patients. But in recent years, an alternative has sprung up: Medicare Advantage plans.
These plans grew out of the Medicare law passed by Congress in 2003, which also authorized the Part D drug benefit. That law established new rules for private insurers that want to offer plans that compete with original Medicare, with its Part A and B. Today, almost a third of Medicare beneficiaries are in Medicare Advantage plans.
Many of the plans are some form of managed care. You might be covered only if you use the plan’s network of doctors or, alternatively, you could be covered if you go to an out-of-network doctor, but you will pay more. Keep in mind that, if you spend considerable time outside your home state, you may have to use out-of-network doctors when you’re away from home—and thus traditional Medicare might be a better choice.
Medicare Advantage plans combine almost everything offered in original Medicare’s Part A and B, plus the plans often include Part D prescription drug coverage. You still have to pay the premium for Medicare Part B, but you don’t need to buy a Medigap policy (and, in fact, insurers are barred from selling Medigap policies to those enrolled in Medicare Advantage). You pay a monthly premium for all of this, though your premium should be lower than the combined premiums for Medicare Part D plus a Medigap policy. The bottom line: Medicare Advantage is often the better choice if you’re in good health and stay that way—or you simply can’t afford the additional premiums required to purchase Medigap insurance and a Part D prescription drug benefit.
Intrigued? You can find plans in your area using the Medicare Plan Finder at Medicare.gov. Before you sign up for a Medicare Advantage plan, check to see which of your doctors are in the plan’s network. Unhappy with your Medicare Advantage plan? It’s possible to return to original Medicare, though you may not be able to get the Medigap policy you want at the price you used to pay. Why not? Under the Affordable Care Act, sellers of health insurance can’t ask about preexisting conditions—but there’s an exception for sellers of Medigap policies.
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