Medicare Advantage (Part C)
More than one third of all Medicare participants are enrolled in some type of Advantage Plan (Medicare Part C), which has steadily increased over the past decade or so. The increased participation could be attributed to value-added benefits of most Advantage plans, such as eye care, hearing and built-in drug plans, however, the main reason could simply be financial. The average premium for a Medicare Advantage Plan with a built in drug plan is usually lower than that of Original Medicare in conjunction with a Medicare Supplement and a Medicare Drug Plan. Lower premiums and extra benefits of most Advantage plans can be a huge deciding factor, especially for those on a fixed income.
So why would participation in Advantage Plans not be higher than 40% (in 2020) considering they have, on average, lower premiums? One resounding reason is restrictions. The ability of private insurance companies to offer lower plan premiums for Medicare Advantage Plans compared to Original Medicare with a Supplement is based on the insurance companies’ management and control of unnecessary spending related to participants’ medical and drug plans. This is often accomplished by the inclusion of HMO and PPO networks. Basically, the insurance company requires the participant of most Advantage Plans to only see doctors and specialists within a certain network. The insurance company may also require the participant to obtain referrals and/or prior authorization to see specialists. These cost-saving requirements can feel restrictive to certain Medicare participants who would rather have the freedom of choosing when, where and from whom they would like to receive medical treatment. Let’s also not forget maximum out-of-pocket expenses, also. When comparing an Advantage Plan to Original Medicare with a Supplement, the consumer’s risk of exposure to higher out-of-pocket costs is usually greater with an Advantage Plan.
As you can see from the illustration below, there are a large number of Advantage plans offered throughout the U.S. For example, there are 30 plans available for Knox County, TN alone. These plans can vary in cost and coverage from region to region and even county to county and therefore marketing of these plans is heavily regulated by the government. For these reasons, Medicare Basic has chosen to only market Medicare Supplement Insurance. However, we can, and often do, offer Medicare Advantage plans to our clients based on the consumer’s best interest and our licensing for a particular state. This is best accomplished by a one on one needs analysis consultation as our commitment to keeping the customer’s best interest in mind is always paramount.