If you’re approaching your 65th birthday, you may be shocked by how many solicitations you’re getting from Medicare Advantage plans. By comparison, you may receive only one official notice about traditional Medicare. Salespeople, mailers, phone calls, and other forms of communication will tell someone turning 65 that the only wise choice is Advantage.
Let me explain the difference.
Medicare: Explaining the Difference
Traditional Medicare confuses the daylights out of people. There are parts A, B, and D, and then there are Medicare supplements.
- Part A: “free” (taxes pay for it) and covers hospitalization.
- Part B: premium-based and covers doctor visits and other expenses other than hospitalization. The premium for Part B is set each year and is the same for everyone except for people considered to be wealthy (who pay a surcharge that can be rather small to quite large).
- Part D: premium-based and covers prescriptions. The premiums vary based on how much drug coverage you buy and who you buy it from. This is different from Part B which is bought directly from the federal government.
- Supplements: You may still have a lot of out-of-pocket expenses even if you have Part B, so you can buy a plan known as a supplement from a private insurer. These plans are standardized in terms of coverage, and there are so many of them that they’re labeled by letters A through N. Each letter has a different level of coverage (Plan G covers the most). The premiums will vary from one insurer to another but know that each plan of a letter will have identical benefits.
The reality is that people’s eyes glaze over when I try to explain all the decisions you have to make when you become eligible for Medicare at age 65. And you face premiums for your Part B, Part D and your supplement such as Plan G. That is why roughly half of people go into privately-run Medicare Advantage plans. Everything is rolled into one. And your total premiums can be cheaper.
Avoid Medicare Advantage Plans
You should know I warn people away from Medicare Advantage plans.
About half of people who are eligible for Medicare choose Advantage plans for any of a number of reasons. And many people are happy with the Advantage plans they’ve picked. In fact, every time I say something negative about them, I hear from people who are upset with me because they are beyond thrilled with the Advantage plan they chose.
My objections are simple. Once you are in an Advantage plan, it’s difficult to switch to regular Medicare. After your first 11 months, in most states, you can’t easily buy a supplement without passing a medical evaluation. And you likely will have trouble switching to a competitor’s Advantage plan if yours turns out to be a bad choice.
In other words, you could end up being a prisoner of the Advantage plan you pick at 65 for the rest of your life — even if it turns out to be crummy or becomes rotten over time. In my opinion, this is a fatal flaw of Medicare Advantage plans. You could also end up with a serious illness, and the choice of doctors and facilities you are allowed under your particular Advantage plan could be the difference between life and death. With traditional Medicare, you have many more options to seek out the best care, best specialists and best hospitals for your illness.
Yes, traditional Medicare is more difficult to understand and buy upfront. Your premiums may be higher. But you are your own boss of your healthcare. With Medicare Advantage, understand that the insurer makes money by limiting your care and your options.
That lower cost could kill you.
Need help or have a question? Call Clark’s free Consumer Action Center at 636-492-5275.
