Why Do So Many Older Adults Choose Medicare Advantage?

When you become eligible for Medicare at age 65, you have a choice between enrolling in Original Medicare or a Medicare Advantage Plan. While many experts recommend Original Medicare paired with supplemental coverage, enrollment statistics show that more and more seniors are opting for Medicare Advantage Plans instead.

In fact, enrollment in private Medicare Advantage Plans has tripled over the past two decades. As of 2022, 48% of all Medicare beneficiaries were enrolled in a Medicare Advantage Plan rather than Original Medicare health plan. The percentage is expected to be even higher in 2023.

What is Medicare Advantage?

Medicare Advantage Plans are offered by private insurers and bundle Medicare benefits in a way many people find appealing. These plans are sometimes called “Part C” or “MA plans” and contract with Medicare to provide enrollees with all their Part A and Part B coverage. Some key facts about Medicare Advantage:

• Plans must cover all services Original Medicare covers
• Many plans include Part D prescription drug coverage
• Additional benefits like dental or vision may be offered
• Provider networks limit which doctors and hospitals you can use
• Out-of-pocket costs differ from Original Medicare

Medicare pays the private insurer a set monthly payment for each Medicare Advantage enrollee’s care. In return, the Medicare Advantage Plan administers all coverage.

Why Are So Many Seniors Choosing Medicare Advantage?

There are several compelling reasons that Medicare Advantage enrollment has skyrocketed among people aged 65 and over:

Lower costs

The most popular Medicare Advantage Plans have no monthly premium beyond the Part B premium. This makes coverage seem “free” versus Medigap Plans with premiums over $100 in many states. Medicare Advantage Plans also cap out-of-pocket spending.

Extra benefits

Many Medicare Advantage Plans include dental, vision, hearing, fitness benefits and more that aren’t part of Original Medicare. These extra benefits appeal to seniors looking for comprehensive coverage.

Familiar structure

For consumers accustomed to HMOs and PPOs before they qualify for Medicare state health insurance assistance program, Medicare Advantage Plans with networks and copays can seem more familiar than navigating Original Medicare.

All-in-one convenience

With medical, drug coverage and sometimes extras bundled together in one plan, Medicare Advantage requires less effort to coordinate than the different parts of Original Medicare.

Influencer opinions

Friends, family members and neighbors often enroll in Medicare Advantage Plans. Seniors tend to follow the crowd and choose what’s popular among their peer group.

Marketing appeal

Medicare Advantage Plans invest heavily in advertising and sales channels that make enrolling seem easy and rewarding. Positive marketing shapes perceptions.

With the lure of low costs, built-in drug coverage, extra benefits and influencer reviews, it’s no wonder an increasing number of older adults choose Medicare Advantage over Original Medicare year after year.

What Do Experts Recommend for Medicare Coverage?

While Medicare Advantage draws in many seniors, experts often suggest Original Medicare paired with supplemental coverage provides better value and protection:

• “Medigap Plans cover costs Original Medicare does not, lowering out-of-pocket expenses,” says Louise Norris, licensed broker and Medicare expert.
• “Original Medicare allows seniors to visit any doctor nationwide who accepts Medicare. Medicare Advantage networks are more limited,” explains Kat Tretina, insurance expert.
• “Savvy Medicare beneficiaries can find comparable extra benefits for less cost outside Medicare Advantage by adding a dental plan or fitness membership,” notes Daniel Frechtling, Medicare financial planner.

According to experts, Original Medicare combined with a Medigap Plan offers lower costs for heavy healthcare users, greater provider choice flexibility, and similar extra coverage compared to Medicare Advantage.

However, experts also acknowledge Medicare Advantage appeals to many older adults for good reason. The plans simplify Medicare and appear free if you don’t use healthcare services frequently.

Pros of Medicare Advantage Plans

There are certainly benefits to Medicare Advantage coverage that help explain its widespread appeal:

Low or no premiums – Many Medicare Advantage Plans have no premium cost beyond the Medicare Part B premium. This makes coverage seem very affordable.

Out-of-pocket cost caps – Medicare Advantage Plans limit how much you’ll pay annually for covered medical care and prescriptions. Original Medicare does not have an out-of-pocket cap.

Prescription drug coverage – Medicare Advantage Plans include Medicare Part D drug coverage with no separate premium in most cases. With Original Medicare, you need to purchase a separate Part D Plan.

Extra benefits – Dental, vision, hearing and fitness benefits are commonly included in Medicare Advantage. You must buy these separately to have the coverage under Original Medicare.

Coordinated care – Medicare Advantage Plans offer an all-in-one approach to care and coverage through provider networks and centralized administration.

Familiar structure – The copays and networks of Medicare Advantage mimic what many seniors were used to before becoming eligible for Medicare.

With these advantages, it’s easy to see the wide appeal of Medicare Advantage for older adults looking for an affordable, convenient Medicare option.

Cons to Consider for Medicare Advantage

However, there are also some potential disadvantages to weigh if you’re considering Medicare Advantage:

Network restrictions – Medicare Advantage Plans have limited provider networks. You may not be able to see your preferred doctors and hospitals. With Original Medicare you can go to any physician or facility in the entire country that accepts Medicare.

Referrals needed to see specialists – In a Medicare Advantage HMO, you usually need to get a referral from your primary care doctor before seeing most specialists. Original Medicare doesn’t require referrals.

Pre-approvals needed for some care – Medicare Advantage Plans may require you to get prior authorization for hospital stays, procedures, tests and other services. This is not necessary with Original Medicare coverage.

Costs for heavy healthcare users – While copays for simple services may be low, percentages you pay for extensive healthcare could lead to higher overall costs in Medicare Advantage versus Medigap’s first-dollar coverage.

No Medigap access – It is illegal to enroll in Medigap and Medicare Advantage at the same time, so you lose the option to purchase supplemental coverage.

Medicare Advantage lacks flexibility – You can only make plan changes at certain times of year and often cannot switch back to Original Medicare without medical underwriting.

Understanding both the pros and cons helps older adults make an informed Medicare enrollment decision based on their unique needs and situation.

What Types of Seniors Are More Drawn to Medicare Advantage?

While Medicare Advantage appeals to nearly half of Medicare beneficiaries today, certain types of older adults find Medicare Advantage particularly beneficial:

Seniors with low health needs – If you rarely visit the doctor or take prescription medications, the low costs of Medicare Advantage make financial sense. You avoid paying higher Medigap premiums for coverage you may not use.

Enrollees who want extras covered – Older adults interested in generous dental, vision and hearing benefits may prefer Medicare Advantage Plans that package in this extra coverage.

Individuals who see local providers – Medicare Advantage networks are acceptable to seniors who don’t seek specialized treatment outside their geographic area and have local provider relationships.

Tech-savvy enrollees – Those adept at using technology can more easily manage Medicare Advantage Plans’ online portals and provider directory tools.

Retirees on limited budgets – Lower-income seniors may gravitate toward $0 premium Medicare Advantage Plans that seem to incur few out-of-pocket costs.

Adults used to managed care – Older adults who had an HMO or PPO before Medicare can more easily navigate Medicare Advantage Plans with similar structures.

While not an ideal choice for all, Medicare Advantage aligns well with several common senior demographics and coverage needs.

What Should You Consider Before Choosing Medicare Advantage?

If you’re an older adult trying to decide between Medicare Advantage and Original Medicare, here are some important factors to consider:

• Current health and prescriptions – If you have complex medical needs, Original Medicare with supplemental coverage may offer better protection. Medicare Advantage may be fine for healthy users.
• Preferred doctors – Check if your providers are in-network with the Medicare Advantage Plan you’re considering before enrolling.
• Travel habits – Frequent travelers may prefer Original Medicare’s nationwide coverage over Medicare Advantage’s regional networks.
• Healthcare costs – Your total expenses may be higher in Medicare Advantage if you need extensive medical services and pay coinsurance versus low Medigap copays.
• Drug coverage needs – Make sure any medications you take are included on the plan’s formulary with acceptable copays.
• Ease of managing coverage – Medicare Advantage offers simplicity, while Original Medicare requires coordinating parts.
• Financial situation – Budget, rather than premiums alone, should dictate what you can afford. Even $0 premium plans can have high deductibles and copays.

Speaking with an independent Medicare advisor can help you sort through these variables to select the type of Medicare coverage that works best given your healthcare needs and lifestyle.

Key Takeaways

• Medicare Advantage enrollment has surged in recent decades, with over 48% of Medicare beneficiaries choosing MA plans in 2022.
• Medicare Advantage Plans appeal to many through their low costs, extra benefits, coordinated coverage, and familiar structure.
• However, experts cite more flexibility and potentially lower costs with Original Medicare plus a Medigap Plan.
• Medicare Advantage makes sense for healthier seniors who don’t need comprehensive coverage.
• Consider your healthcare needs, doctors, budget, and more before deciding between Medicare Advantage and other options.
• Speaking with a Medicare specialist can help identify the right type of Medicare coverage for your situation.

In most cases, neither Medicare Advantage nor Original Medicare is inherently “better” or “worse” than the other. What matters most is choosing the option that provides appropriate coverage, flexibility, and value given your individual healthcare needs as a senior.

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FAQS

Why do so many older adults choose Medicare Advantage?

Many older adults choose Medicare Advantage because it offers a variety of coverage options and additional benefits that may not be available with traditional Medicare.

What does Medicare Advantage offer?

Medicare Advantage offers plans that are bundled, meaning they combine both hospital and medical coverage into one plan. It also often includes prescription drug coverage and may offer additional benefits such as dental, vision, and hearing.

Who can enroll in Medicare Advantage?

Medicare Advantage is available for individuals who are already enrolled in Medicare Part A and Part B . These individuals, often referred to as Medicare beneficiaries, have the option to enroll in Medicare Advantage instead of traditional Medicare.

What is the source of coverage for Medicare Advantage?

Medicare Advantage Plans are offered by private insurance companies approved by the Centers for Medicare and Medicaid Services (CMS). These plans receive funding from Medicare to provide coverage to beneficiaries.

How do I choose a Medicare Advantage Plan?

When choosing a Medicare Advantage Plan, it is important to consider your individual needs and preferences. You can compare plans based on factors such as cost, coverage, network of providers, and additional benefits offered.

What is the Open Enrollment Period for Medicare Advantage?

The Open Enrollment Period for Medicare Advantage occurs annually from October 15th to December 7th. During this time, beneficiaries can switch from traditional Medicare to Medicare Advantage or change their Medicare Advantage Plan.

Are Medicare Advantage Plans instead of Original Medicare?

Yes, Medicare Advantage Plans are an alternative to Original Medicare. When you enroll in Medicare Advantage, you will still be enrolled in Medicare, but your coverage will be provided through the Medicare Advantage Plan.

What is a Medicare Supplement Plan?

A Medicare Supplement Plan, also known as a Medigap policy, is a type of private insurance that can help cover some of the costs that are not covered by Original Medicare. It works alongside Medicare to fill in the “gaps” in coverage.

Why is Medicare Advantage popular among Medicare beneficiaries who are older ?

Medicare Advantage is popular among older adults because it offers a wider range of benefits and services compared to traditional Medicare. These additional benefits, such as dental coverage, fitness programs, and transportation services, can be attractive to older adults who value comprehensive coverage.

How many older adults are enrolled in Medicare Advantage?

The number of older adults enrolled in Medicare Advantage is steadily increasing. According to experts, the number of people with Medicare choosing Medicare Advantage Plans instead of Original Medicare is projected to continue growing in the coming years.