The Kaiser Family Foundation recently reported that over 30% of all Medicare beneficiaries are now enrolled into Medicare Advantage plans. Also called Part C of Medicare, Advantage plans have become increasingly popular in recent years due to lower premiums and several other factors.
Prior to the Balanced Budget Act of 1997, the only choice for supplemental coverage for Medicare was traditional Medicare supplements which pay after Medicare. These plans, while comprehensive, can sometimes be costly for senior citizens who have fixed incomes.
Medicare Advantage plans offer several features that we expect will cause enrollment to continue to grow. Let’s take a look at those:
One ID Card
When people enroll in a Medicare supplement, they must present their Medicare card and their Medicare supplement card to their providers. Their coverage also does not include Part D, so they have to purchase that separately and present this third card to their pharmacy when filing medications.
Many baby boomers aging into Medicare used to group health insurance through their employers where they have only one ID card. Medicare Advantage plans wrap up Medicare Parts A, B, and D all into one card. The convenience of having only one membership card feels familiar to these Medicare newbies, and often they will join Medicare Advantage plans for this reason.
Pay As You Go
Unlike Medigap, where premiums are higher up front and you have less spending on the back end, Medicare Advantage plans are pay as you go. Medicare Advantage premiums are often much lower than Medigap plans and in some counties, you can even find plans with a $0 premium.
When you seek treatment from the providers in the plan’s network, you pay copays for your services as you go along. You might spend $10 to see your doctor or $40 for a specialist. Labwork or an X-ray might cost you $20. You only pay for these services when you receive them. This sometimes easier on your wallet than coughing up a big Medigap premium each month whether you are using medical services or not.
There are currently over 2000 Part C plans across the nation. This means that in every county, each Medicare beneficiary will have at least a dozen or more plans available to them. When more plans develop networks in a certain area, it becomes easier to find Medicare Advantage plans that have the doctors and hospitals that you want inside their network.
More choices also increase the competition, and the insurance companies strive to make the plans better to attract members.
Medicare Advantage plans sometimes have extras built into the plan. This might include routine vision care, a preventive dental plan, and at least some coverage for hearing exams or hearing aids. Some plans also include free gym memberships through programs like Silver Sneakers. These are benefits you can’t get from Original Medicare and a Medigap plan.
For these reasons, Medicare Advantage plans continue to grow in popularity. It’s likely that as healthcare inflation continues to escalate, we’ll continue to see enroll in these plans growing. To learn more about the differences between Medicare supplements and Medicare Advantage plans, you can visit this blog about Medicare insurance.