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Why you should consider a Medicare Advantage plan

Industry News | Dec 11, 2015

The open enrollment period for Medicare and Medicare Advantage plans ended Dec. 7, but it is never too early to start thinking about next year. Are you still not sure which plan is right for you? Or are you even a bit confused about the differences between the two? Don't worry, you are not alone.

While there are benefits to both plans, Medicare Advantage offers several benefits that traditional Medicare does not. Every year more and more beneficiaries age 65 and over select Medicare Advantage as their health insurance plan, and there are a number of reasons you should do the same.

What is the difference between Medicare and Medicare Advantage?
With Medicare Advantage, you can receive the health benefits offered by both Medicare Part A and Part B through a private insurance company. While private companies manage Medicare Advantage plans, they are still regulated by the U.S. government.

Seniors enrolled in Medicare Advantage receive everything Medicare provides (hospitalization costs, doctors bills and certain preventive screenings), as well as additional benefits. The number of seniors who choose Medicare Advantage is growing rapidly. It has grown from 5.3 million people in 2004 to 16.8 million in 2015, according to the Kaiser Family Foundation.

"Seniors enrolled in Medicare Advantage receive everything Medicare provides, as well as additional benefits."

There are three main types of Medicare Advantage Plans: Health Maintenance Organizations, known as HMOs; Local Preferred Provider Organizations, known as Local PPOs; and Regional PPOs. In 2015, 64 percent of Medicare Advantage Plans are HMOs, 24 percent are local PPOs, 7 percent are Rural PPOs, and a few other smaller plans make up the rest.

The average premium for those enrolled in Medicare Advantage in 2015 is $38 per month. Kaiser reported that in 2016 there will be approximately 19 Medicare Advantage plans to choose from, which has not changed much in the past few years. They will be relatively similar to those plans offered in 2015.

The benefits to Medicare Advantage
There are three major benefits to choosing Medicare Advantage over traditional Medicare: prescription drug coverage, caps on out-of-pocket spending and coverage of dental, vision and assisted living costs. No traditional Medicare plan provides any of these benefits.

In 2015, 86 percent of Medicare Advantage plans offer prescription drug coverage. The number is rising, as in 2014 prescription drug coverage was offered by 83 percent of plans, according to Kaiser.

Since 2011, it has been mandatory for Medicare Advantage plans to place a limit on out-of-pocket spending for beneficiaries. This is incredibly advantageous if you have a condition that requires regular visits to the doctor or specialists. No limit can exceed $6,700. The cap is not the same for every plan, but when you reach it you will have no more out-of-pocket expenses during your plan's coverage. In 2015 the average out of pocket limit was $5,041.

"The majority of those enrolled in Medicare Advantage saw no rise in their 2016 premiums."

USA Today reported that the cost for Medicare Part A will rise in 2016, yet the Pittsburgh Post-Gazette said that the majority of those enrolled in Medicare Advantage saw no rise in their 2016 premiums. For some beneficiaries, the prices even fell.

Remember: If you live in an assisted living facility or have health problems that require frequent visits to the eye doctor or dentist, there are several Medicare Advantage plans that will ensure you're covered.

Additionally, the New York Daily News said if you are currently enrolled in traditional Medicare, but you have supplemental plans like Medigap, switching to Medicare Advantage could save you money.