Understanding Medicare Advantage: What It Is, What It Covers, and Whether It’s Right for You

Comments Off

Medicare Advantage, also known as Medicare Part C, is a popular alternative to Original Medicare (Parts A and B). Instead of being run directly by the federal government, these plans are offered by private insurance companies approved by Medicare. They’re designed to provide all the same benefits as Original Medicare, but often with additional perks.

However, as with any healthcare decision, it’s important to understand both the benefits and the potential drawbacks.

See Understanding Your Medicare Options in Retirement: Original Medicare, Advantage, and Medigap Explained – Gilbert Wealth for an overview of Medicare options.

What Is Medicare Advantage?

Medicare Advantage is an “all-in-one” bundled alternative to Original Medicare. These plans include:
Part A (Hospital Insurance)
Part B (Medical Insurance)
Often Part D (Prescription Drug Coverage)

In other words, when you enroll in a Medicare Advantage plan, you’re still part of the Medicare program, but your benefits are administered through a private insurer rather than directly through the government.

Coverage

Every Medicare Advantage plan must cover at least what Original Medicare covers. However, many go beyond that baseline, offering:

Vision, hearing, and dental coverage
Prescription drug coverage (Part D)
Fitness programs (e.g., SilverSneakers)
Transportation to medical appointments
Over-the-counter allowances for things like vitamins and pain relievers
Telehealth services

Coverage and extras vary by plan and location, so it’s important to compare options carefully.

What Is It Like to Be on a Medicare Advantage Plan?

Being on Medicare Advantage can feel more like being on a traditional private health insurance plan, similar to what you may have had during your working years. Most plans operate as:

HMO (Health Maintenance Organization): You choose a primary care doctor and need referrals to see specialists. Out-of-network care is usually not covered except in emergencies.
PPO (Preferred Provider Organization): You have more flexibility to see out-of-network providers, though at a higher cost.

Because these plans are administered, you may receive a more coordinated care experience as your providers often have to work together.

Plan Hassles

You will still deal with:

Deductibles
Copays and coinsurance for doctor visits and procedures
Maximum Out of Pockets
and In-Network and Out-of-Network

Most plans require you to use a specific network of doctors and hospitals. If you travel often or have doctors you want to keep, this is an important consideration. See Medicare and Travel: How Your Coverage Works When You’re Away from Home – Gilbert Wealth

Paying Premiums

When on a Medicare advantage, you’ll still pay your Medicare Part B Premiums from your Social Security benefit if you are claiming or directly to Medicare. If the plan has an additional premium, you’ll pay that to the Medicare Advantage provider.

Low, Zero Premiums or Premium Reduction

Medicare Advantage plans are often chosen for their low or zero premiums. In some cases, the plan may offer a Medicare Part B premium credit to offset you’re Medicare Premiums.

Afterall, if they are legally required to offer the same benefits as Original Medicare plus they offer other benefits, why not?

By allowing Medicare Advantage plans, the government is effectively offloading the cost of your healthcare to a private company. For example, the government might estimate they will spend $10,000 per year on a retiree in health costs. To lessen this, they will pay an insurance company $7,000 a year per enrollee. This “saves” the government $3,000. (the numbers are made up for illustration purposes).

Now the insurance company has $7,000 to do the following: 1) provide for your care, 2) pay its employee and expenses, 3) provide a profit margin for shareholders.

Because your cost of care might still be $10,000, the insurance company adds back features that may raise your annual cost if you use care.

This is done through deductibles, co-pays, and through limiting availability to care.

Changing Your Mind

While Medicare Advantage plans may offer attractive perks and low premiums, switching back to Original Medicare later isn’t always easy.

If you choose an Advantage plan first and later want to enroll in a Medigap (supplement) policy, you may be subject to medical underwriting—meaning insurers can deny coverage or charge higher premiums based on your health.

Unlike the one-time Medigap open enrollment period when you first join Medicare Part B, you’re not guaranteed the right to get a Medigap plan after leaving Advantage.

This makes your initial choice especially important if you want long-term flexibility and broad provider access.

The rules vary by state but should be carefully considered.

Pros

Considerations

Final Thoughts

Choosing between Medicare Advantage and Original Medicare isn’t just about costs—it’s about how you want to receive care, what level of choice and control you need, and how predictable you want your out-of-pocket costs to be. The right choice varies by person and can even change as your health or lifestyle changes. Reviewing your options annually during Medicare’s Open Enrollment period (Oct. 15 – Dec. 7) ensures your plan keeps up with your needs.

If you’re feeling uncertain, a conversation with a trusted financial advisor or Medicare counselor can help you weigh your options in light of your health, finances, and personal preferences.