What do Medicare Advantage plans currently cover?
Americans have the option of choosing Original Medicare or a Medicare Advantage plan that can offer additional benefits on top of mandatory coverage.
Most Americans when they reach age 65 must sign up for Medicare to avoid paying a late enrollment penalty. At the time of enrollment they will have the choice between Original Medicare and a Medicare Advantage plan. The latter plans, also known as ‘Part C’, are offered through private companies approved by Medicare, which pays the companies to cover your Medicare benefits.
According to data from KFF, a healthcare think tank, over half of Americans on Medicare had signed up for Medicare Advantage plans in 2023. The amount is expected to exceed 60 percent around 2030. The main attraction to Medicare Part C plans are the benefits that they offer that Original Medicare does not.
What do Medicare Advantage plans currently cover?
Medicare Advantage plans must cover all of the services that Original Medicare covers in Part A (Hospital Insurance) and Part B (Medical Insurance) except hospice care. Additionally, they must cover emergency and urgent care as well as when it is needed anywhere in the United States, but not aboard.
Most plans include Medicare Part D, which is prescription drug coverage. And many offer extra benefits like dental care, vision care, or wellness programs that aren’t included in Original Medicare.
Medicare Advantage functions in a similar way to traditional employer health insurance. Generally, you will have to stay within the plan’s network of healthcare providers except as mentioned above for emergency or urgent care. You will also be responsible for deductibles, copays and coinsurance as laid out in the plan being sold.
Out of pocket costs are capped up to $8,850 in 2024 according to Nerdwallet. This is not the case with Original Medicare, but you can sign up for additional coverage through a Medigap plan, which could cover some out-of-pocket costs. It may also include some of the benefits of a Medicare Advantage plan mentioned above.
You may also be interested in: What should you do if the hospital drops your Medicare Advantage plan?
Medicare Advantage versus Original Medicare: What to consider
When choosing between Medicare Advantage and Original Medicare plans keep in mind that for the former the benefits and network can change from year to year. You’ll also want to consider potential health issues you may face down the road and what your financial situation will be in retirement.
Original Medicare will provide you with more flexibility with the providers that you will be able to see. This is also a benefit if you plan to travel often in retirement. Those who are frequent healthcare users or have the risk of developing a serious health condition in the future may find Original Medicare more financially affordable with a Medigap policy than Medicare Advantage.
Medicare Advantage may be a better fit for those who live in an area with a extensive network of healthcare providers. Also if paying for Medigap would be too expensive for your budget.
For more information on plan types you can visit Medicare.gov where you will find which ones are available in your area. You can also call 1-800-MEDICARE (1-800-633-4227). The number for TTY users is 1-877-486-2048.