Medicare Advantage

Is a Medicare Advantage Plan Right for You?


When you become eligible for Medicare, you have a choice in how to receive your Medicare benefits. If you’re nearing age 65, you may have noticed your mailbox filling up with offers for Medicare Supplements, Medicare Part D drug plans, and Medicare Advantage plans. You may want to know more about the advantages of enrolling into the Medicare Advantage program, or even what the difference is between Medicare Advantage and original Medicare.

In a nutshell, Medicare Advantage is the Medicare Part C program under which Medicare beneficiaries agree to receive their benefits through private insurance company plans that contract with Medicare on a year-to-year basis. The Part C program was created by the Balanced Budget Act of 1997, when private health insurance companies convinced Congress they could provide the same coverage that Medicare offers at a reduced cost. Since then, the program has expanded, and currently about 25% of all Medicare enrollees have a Medicare Advantage plan.

Medicare Advantage plans vary widely in premium (some plans have zero plan premium in addition to the Medicare Part B monthly premium, or even refund all or a portion of the Part B premium) and in the specific benefits they offer. Some may only provide the benefits of original Medicare, but most plans include prescription drug coverage, dental and vision benefits; and some plans even provide free gym memberships! A plan that includes Part D prescription drug benefits is called MA-PD, short for Medicare Advantage Prescription Drug plan.

For Medicare beneficiaries who opt against Medicare Advantage and stay on original Medicare, it’s usually a good idea to enroll into a standalone Medicare Part D drug plan since original Medicare doesn’t cover most drugs. Part D plans come with a monthly premium, as do Medicare Supplement (Medigap) policies that are designed to fill the benefit gaps in Medicare.

While Medicare Advantage plans typically feature low co-pays for doctor office visits and procedures, they may include greater out-of-pocket costs for care such as hospital visits and major diagnostic testing. Therefore, as a general rule Medicare Advantage plans are most cost-saving to healthy individuals who have the good fortune to stay out of the hospital; but in any case the plans have a maximum out-of-pocket limit that serves to cap your total expense.

You can join a Medicare Advantage plan if you meet these conditions:

• You have Medicare Parts A & B

• You live in the service area of the plan

• You don't have End-Stage Renal Disease (ESRD) (permanent kidney failure requiring dialysis or a kidney transplant)

In most cases you can join a Medicare Advantage plan only at certain times during the years. See How Medicare Advantage Plans Work for more information.

For help deciding what’s best for you, download our Medicare Decision-Making Guide!



Although Medicare Advantage plans typically are financially beneficial to the enrollee, they are not necessarily good for the government. Medicare Advantage initially was created in order to reduce government spending, yet the federal government now pays on average 10-15% more for those enrolled in Medicare Advantage, as compared to those on traditional Medicare. Clearly this hugely popular program will be coming under pressure in the near future, as the federal government tries to rein in costs on Medicare and Social Security.

Do you have an opinion about the Medicare Advantage program? Please let us know!

Until next time,

Andrew