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What are the Advantages and Disadvantages of Medicare Advantage Plans?




The purpose of this blog is to lay out the advantages and disadvantages of Medicare Advantage plans (also known as Part C plans).

I’ll first give a quick background of where and why Medicare Advantage plans started, and then I’ll dig deep into the pros and cons.


Medicare Advantage plans are offered by managed care organizations (private insurance companies), like UnitedHealthcare, Humana, Aetna, Cigna, Allwell, WellCare, Anthem, BlueCross BlueShield and many more.

They replace the traditional Medicare program, with two primary goals:

Medicare Advantage Plans 2020 goals


Expand Medicare beneficiaries’ choices with more comprehensive benefits than what Original Medicare covers.


Lower the overall cost of Medicare for both the government and the consumer.

Although these goals were never really met early on as they were first introduced, these past several years have proven that Medicare Advantage plans are meeting and starting to exceed consumer and government expectations.

More and more Medicare beneficiaries are jumping into Medicare Advantage plans as they have been proven, in a lot of cases, to provide more comprehensive coordinated care, extra benefits that Medicare doesn’t cover, and have saved the consumer money on their health care related expenses.

If you are considering jumping from traditional Medicare to a Medicare Advantage plan, you’re not alone. They are continuing to gain popularity. So, let’s dig deeper into how exactly these plans work and the advantages and disadvantages of them. As with any major financial related decision you make, I always recommend that you talk to an expert about your own personal and unique situation.

Medicare Advantage plans are amazing, but they are not for everyone. Look for a licensed health-insurance agent in your area that is licensed to offer both Medicare Advantage plans as well as Medicare Supplement plans. That way you don’t get a biased view of one over the other.

Original Medicare Medicare Advantage Plans

Original Medicare offers great health insurance for a pretty inexpensive monthly premium (known as the Part B premium). The monthly Part B premium is $144.60 (in 2020). Original Medicare typically covers 80% of your health care expenses and has two parts:

Part A: which covers hospital expenses

Part B: which covers medical/doctor expenses

Medicare Advantage plans combine (or bundle) Part A and Part B (and usually Part D) into a single plan and are offered by private health insurance companies. They replace Original Medicare, and cover everything that Medicare covers.

If you want drug coverage, you will want to enroll in a stand-alone Part D Prescription Drug plan.

Medicare Advantage plans combine (or bundle) Part A and Part B (and usually Part D) into a single plan and are offered by private health insurance companies. They replace Original Medicare, and cover everything that Medicare covers.

To help pay for the 20% that Original Medicare doesn’t cover, you can shop for and purchase a Medicare Supplement policy.

Medicare Advantage plans combine (or bundle) Part A and Part B (and usually Part D) into a single plan and are offered by private health insurance companies. They replace Original Medicare, and cover everything that Medicare covers.

Instead of paying a 20% co-insurance and deductibles, you will pay co-pays for services rendered.


I will now list the advantages and disadvantages of Medicare Advantage plans. In some cases, you will find that an advantage for one person might be viewed as a disadvantage for another person. Hence the reason it’s important that you consider your unique situation to determine if Medicare Advantage plans are right for you.

Doctor and Hospital Choice

Advantages Disadvantages

Medicare Advantage plans offer a coordinated care approach. The doctors you see generally have a means to communicate with each other. This allows for a health plan to review a patient’s health situation and coordinate services needed to provide individualized care.

If you enroll in an HMO Medicare Advantage plan, you are limited to seeing doctors and hospitals that are contracted with the plan. If all your current doctors are contracted with the plan, that’s great. But doctors can decide not to contract with your plan next year. So, pay attention and check with your doctor each year to make sure they will remain contracted with your plan.

PPO Medicare Advantage plans have a preferred network of doctors and hospitals, but offer the flexibility of using non-network providers, often nationwide.

You may need a referral to see a specialist. Some people view this as a disadvantage while others view that as an advantage…they want their primary doctor and their specialist to communicate with each other.

Bottom line: Medicare Advantage plans limit you to a network of doctors and hospitals. Whereas Original Medicare allows you to see any doctor and any hospital that accepts Medicare.


Advantages Disadvantages

Medicare Advantage plans generally have a very low monthly premium, and in large metropolitan areas, the monthly premium can be as small as $0 per month.

Some people just don’t like having co-pays. They would rather pay a flat monthly payment for a Medicare Supplement, and then sleep at night knowing that if they have to use their Medicare coverage, they will not have to pay co-pays or deductibles.

In addition, Medicare Advantage plans put a limit on how much you will pay out of pocket each year. Once you reach your maximum out-of-pocket limit, the plan pays 100% of the Part A and Part B costs.

It’s a good idea to compare your annual cost for a Medicare Supplement to the combined cost of co-pays you would pay in any given year and figure out what will cost more. Of course, this is hard to do because you don’t always know if you will have a medical need each year.

Bottom line: In some cases (remember, your individual needs may be different) your annual costs will be less with a Medicare Advantage plan than Original Medicare with a Supplement.

Some will say, “I’m super healthy…I never go to the doctor.” If that stays true next year, then Medicare Advantage will cost you less. But what if? Make sense?


Advantages Disadvantages

Medicare Advantage plans must cover everything that Medicare will cover. So that’s never a worry.

Medicare Advantage plans often will require prior authorization before services are rendered. Whereas Original Medicare is a little more straightforward with less hoops to jump through.

In addition, Advantage plans may offer other benefits that Medicare doesn’t cover like:

  • Dental
  • Vision
  • Hearing
  • Gym Membership
  • Over-the-counter health catalogs
  • Podiatry
  • Chiropractic

In addition, most Advantage plans include the prescription drug (Part D) coverage as part of the plan.

A Medicare Advantage plan can restrict certain coverage limits. For example, if your doctor recommends that you have eight physical therapy sessions due to a recent outpatient procedure, the plan can come back and restrict your physical therapy visits to five based on “customary and usual”. Your doctor can always push back on the plan, but some don’t like having the headache of this type of thing.


Advantages Disadvantages

More and more, Medicare Advantage plans are starting to get more flexible with travel. For example, some offer foreign travel emergency coverage. Original Medicare doesn’t offer that.

One of the biggest disadvantages of Medicare Advantage plans is the restrictions it places when you’re traveling (both in the U.S. and abroad).

For example, you are taking your Amazon jungle safari, and you slip and fall. Some Medicare Advantage plans will reimburse you (minus the co-pays of course) for the Air Ambulance ride and hospital fees you incurred in Brazil.

If you enroll in an HMO Advantage plan, then you will only have emergency (including urgent care) coverage outside of the network of doctors and hospitals.

In addition, some Advantage plans are starting to offer programs that allow you to make your plan portable to other states and counties. And PPO plans are offering nationwide networks.

Again, for some, this may not be a big deal. But if you have a winter home and a summer home, and you split your time between the two, then an HMO Advantage plan may not be a good fit.

Bottom line: Medicare Advantage plans are becoming more flexible with travel, both in the US and abroad.

Overall, if you’re familiar with how a group/employer health plan works, you’ll recognize how a Medicare Advantage plan works. It’s very similar. Lots of people love that model and are used to it. They enjoy the coordinated care, low out-of-pocket costs, and are just fine with seeing doctors and hospitals in a given network. You will also enjoy the extra benefits that Medicare Advantage plans offer, such as dental, vision, hearing and more.

For others, purchasing a Medicare Supplement is wise and prudent. Although you won’t enjoy the extra benefits that Advantage plans offer, you will have extreme flexibility with doctor and hospital choice. That world-renowned specialist across the country – you can see her (assuming she accepts Medicare and is accepting new patients) when you are on Original Medicare. You also don’t have to worry about prior authorizations for certain tests and procedures. You will enjoy a whole lot of flexibility.


As I’ve said in previous blogs, rely on someone that had experience in educating and offering Medicare plans to our aging Americans.

A broker that only sells Medicare Supplement policies will always make a Supplement look superior to a Medicare Advantage plan. And in some cases, this is true

Licensed Medicare Insurance Broker in AZ

But Supplements aren’t the way to go for everyone. A good Medicare Broker will take the time to understand your health needs, who your doctors are, what medications you take, and what your tolerance level is for paying out-of-pocket costs vs. monthly premiums.

A good broker licensed with all the options will take the time to really explain to you, in-person, the difference between Advantage plans and Supplements, and will allow you to make the choice…not them. You will really appreciate a broker that will take the time to show you the whole picture instead of just pushing one product over another.

It’s that simple – choose a local broker, that knows the market, understands the networks of doctors and hospitals, and will take the time to explain the difference between supplements and advantage plans.


My goal with this blog was to help you understand the pros and cons of Medicare Advantage plans. Here’s the bottom-line recap:

Pros of an Advantage Plan:

  • Low monthly premium – as mentioned, in large populated regions, Advantage plans often have $0 monthly premiums.
  • Extra benefits – most Medicare Advantage plans offer extra benefits that Original Medicare doesn’t cover, like free gym memberships, vision coverage, dental coverage, hearing coverage and over-the-counter catalogs.
  • Most Advantage plans include the prescription drug coverage in the plan.
  • Advantage plans have an annual maximum out-of-pocket limit, which limits your financial exposure.

Cons of an Advantage Plan:

  • HMO/PPO Networks – some people just don’t like having a restriction of an HMO or PPO type of plan.
  • Referrals – some Advantage plans require referrals from your primary care doctor before you can see a specialist.
  • Medicare Advantage plans may require prior authorization for certain procedures, and can even push back on a doctor’s recommendation.

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