How to choose a medicare advantage plan

Ready to Retire

Dear Ready,

Medicare Advantage plans have become very popular among retirees over the past 15 years, as nearly half of all new Medicare enrollees are signing up for Advantage plans, which accounts for about 42 percent of the entire Medicare market. Here are some tips and tools to help you pick a plan that fits your needs.                                                                              

First, let’s start with a quick review. Medicare Advantage plans (also known as Medicare Part C) are government approved health plans sold by private insurance companies that you can choose in place of original Medicare. The vast majority of Advantage plans are managed-care policies such as HMOs or PPOs that require you to get your care within a network of doctors.

If you join an Advantage plan, the plan will provide all of your Part A (hospital insurance) and Part B (medical insurance) coverage like original Medicare does. But many plans also offer extra benefits like dental, hearing and vision coverage along with gym/fitness memberships, and most plans include prescription drug coverage too.

Medicare Advantage plans are also cheaper than if you got original Medicare, plus a separate Part D drug plan and a Medigap policy. Many Advantage plans have $0 or low monthly premiums and don’t always have a deductible, but they also typically have a high out-of-pocket maximum. In 2021, Advantage plan participants on average were responsible for a maximum of around $5,100 for in-network care, and about $9,200 when out-of-network care is included

How to Choose

To help you pick a plan, a good first step is to call the office managers of the doctors you use and find out which Advantage plans they accept, and which ones they recommend. Then go to the Medicare Plan Finder tool at Medicare.gov/plan-compare to compare Advantage plans in your area. This tool provides a five-star rating system that evaluates each plan based on past customer satisfaction and quality of care the plan delivers. When comparing, here are some key points to consider:

Total costs: Look at the plan’s entire pricing package, not just the premiums and deductibles. Compare the maximum out-of-pocket costs plus the copays and coinsurance charged for doctor office visits, hospital stays, visits to specialists, prescription drugs and other medical services. This is important because if you choose an Advantage plan, you’re not allowed to purchase a Medigap policy, which means you’ll be responsible for paying these expenses out of your own pocket.

Drug coverage: Check the plan’s formulary – the list of prescription drugs covered – to be sure all the…