What Are the Benefits and Limitations of Medicare Advantage Plans?

Medicare is a federally administered health care program for the elderly and disabled. Those with Medicare have many options for their care. While most choose to get their care directly through the federal government through the original Medicare program, more and more people are signing up for Medicare private plans called Medicare Advantage (MA) plans. When deciding between MA plans and original Medicare, one should look at some of the pros and cons of the program.

All-In-One Care

• Because most MA plans are packaged with a Part D plan, the beneficiary is receiving care from less organizations which can make understanding billing and the plan's rules much easier.

Additional Benefits

• In order to justify the additional costs and inconveniences, MA plans are often packaged with many additional benefits. MA plans offer the baseline original Medicare benefits, plus some offer dental coverage, vision care and preventive services.

Lower Costs than Traditional HMOs

• MA plans are typically less expensive than a traditional HMO plan. This is because MA plans are subsidized by the federal government which enables them to offer their coverage at lower prices.

Higher Costs than Original Medicare

• The costs for MA plans are, on average, higher than the costs for original Medicare. MA beneficiaries may expect higher deductibles, higher premiums and more out-of-pocket costs due to plan restrictions.

Care Restrictions

• MA plans are allowed to impose restrictions on the services they offer. Some of these restrictions include prior authorization, step therapy (requiring the beneficiary to try something cheaper before approving a treatment) and quantity limits (limiting a beneficiary to only 30 pills a month when perhaps they require 60.) A report by the Medicare Rights Center says this can mean a lengthy appeals process for beneficiaries who are denied or are barred from receiving the coverage they need due to these restrictions.

Networks

• Most MA plans are designed with a network of providers. In an HMO, for example, a beneficiary cannot see a doctor outside of the network. This may mean a beneficiary can't see the doctor they want to see, or in the case of a PPO, they may be able to see the doctor, but at a much higher price. Networks also pose an inconvenience for those who travel frequently.

Not Available Everywhere or to Everyone

• MA plans are not available for those who have End-Stage Renal Disease, and you are limited in your MA plan choices depending on where you live.