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Senior citizens have a number of important financial decisions to make in their golden years. One of the most important is deciding between original Medicare or an alternative plan known as Medicare Advantage (aka Plan C) once they reach the eligible age of 65. With healthcare costs rising faster than broader inflation, choosing the wrong plan can mean paying far more than you need to for medical care during retirement.

Original Medicare has been around for more than five decades, and about 38 million people are currently enrolled in this tried-and-true government-sponsored program. But original Medicare has its downfalls. "Original Medicare" -- which consists of Part A (hospital insurance) and Part B (outpatient services) -- is a one-size-fits-all package, and it lacks key coverage components that many seniors are looking for.

Seven things you should know about Medicare Advantage plans

This could be why roughly 18 million people out of the 56 million enrolled in a Medicare-based plan have opted for a Medicare Advantage plan. Here are some of the key things you should know about this increasingly popular option to help decide if it's right for you.

1. You still get Medicare coverage

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When you opt for an alternative to original Medicare, it doesn't mean you'll give up the services or rights that come with original Medicare. With the exception of hospice care, Medicare Advantage plans are required to offer the same services as original Medicare Part A and Part B. Additionally, even if you're enrolled in a Medicare Advantage plan and not original Medicare, original Medicare will step in and cover your hospice care.

In addition, you're protected from paying excessive costs for some services under Plan C. For example, if you need dialysis, chemotherapy, or skilled nursing care, your Medicare Advantage plan can't charge you more than original Medicare would bill for these services.

2. You'll have more coverage options

Arguably the greatest allure of Medicare Advantage plans is the amount of choice you have as the consumer. Medicare Advantage plans are offered by private insurance companies, meaning they tend to contain all components of Medicare in one neat package. Whereas original Medicare consumers may have to enroll in each component separately (Part A, Part B, or Part D, which is prescription drug coverage), Medicare Advantage plans contain these coverage components under one umbrella.

Also, Medicare Advantage plans typically cover basic vision, hearing, and/or dental exams, which cannot be purchased through original Medicare.

3. You'll probably have to get referrals to see a specialist

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One of the quirks of Medicare Advantage plans is that if you need to see a specialist, you may need a referral first. Because your plan is covered by a private insurer and not through the government, health-benefit providers can be a bit pickier about which doctors you see and which services will be covered. In other words, there could be more steps involved with specialized medical care if you have a Medicare Advantage plan.

4. Your network will probably be smaller

Original Medicare is a massive government-sponsored plan, and as such, it is accepted by over 90% of hospitals and physicians around the country. By contrast, your Medicare Advantage plan has probably contracted with a smaller handful of physicians and hospitals, meaning that your medical care choices are narrower. Long story short, because your plan is offered by a private insurer, both the price and the approved physicians within the network can change annually.

5. There are annual out-of-pocket limits

Now back to the advantages -- next up, annual out-of-pocket limits. Under original Medicare, there are no limits on how much of your own money you can pay for medical care. Typically, original Medicare covers 80% of your medical expenses, with the remainder falling on your shoulders. If you happen to undergo treatment with any new cancer drug, you could be looking at an annual out-of-pocket cost of more than $20,000. That's where a Medicare Advantage plan could be handy.

In 2016, Medicare Advantage plans have annual out-of-pocket limits of $6,700. This means seniors who decide to purchase a Medicare Advantage plan may have a better idea of how much their medical care will cost relative to a patient with original Medicare.

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6. But your out-of-pocket costs could be higher before hitting those limits

Although Medicare Advantage plans limit how much you'll owe out of pocket, there are no guarantees that your out-of-pocket payments leading up to that $6,700 won't be higher under a Medicare Advantage plan. For instance, certain services under a Medicare Advantage plan could require a higher copay, and if you have to go out of network for care, then your out-of-pocket costs could be higher than they would be if you were enrolled in original Medicare.

It's also important to note that prescription drug costs don't count toward your annual out-of-pocket limit.

7. The enrollment period is limited

Finally, you should know that there's a pretty narrow window during which to enroll in a Medicare Advantage plan each year. The period between Oct. 15 and Dec. 7 each year is reserved for consumers to enroll in Medicare Advantage plans or to enroll in parts of original Medicare.

There is a separate period of Jan. 1 to Feb. 14 each year that allows consumers to disenroll from a Medicare Advantage plan and enroll in original Medicare, but this is a one-way street that does not allow consumers to disenroll from Medicare in favor of a Medicare Advantage plan. If you're interested in Plan C, you'll need to enroll between Oct. 15 and Dec. 7.

Whether Medicare Advantage is the right plan for you depends on a number of factors. But with a growing number of Americans choosing Medicare Advantage plans, it's certainly worthwhile to consider all of your options when choosing a plan.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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