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Here's Why It Could Pay to Get a Medicare Advantage Plan in 2020

By Maurie Backman - Oct 3, 2019 at 7:01AM

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Hint: There could be some major savings involved.

Millions of seniors rely on Medicare for health coverage once they turn 65, but original Medicare -- consisting of Parts A, B, and D -- isn't your only option in this regard. You can instead enroll in a Medicare Advantage plan, and use it as your all-in-one solution for your healthcare needs during retirement.

Medicare Advantage doesn't have different parts for hospital care, preventive services, and prescription coverage like original Medicare. Rather, with Advantage, you sign up for a single plan and pay a single premium for it. Medicare Advantage plans, by law, must offer the same level of coverage as original Medicare, but sometimes, you'll get that coverage at a lower cost.

Older man holding a pill in one hand and a glass of water in the other

IMAGE SOURCE: GETTY IMAGES.

This especially holds true for 2020. In fact, the Centers for Medicare & Medicaid Services recently announced that Medicare Advantage premiums in 2020 are expected to drop 23% from 2018, while plan options and their associated benefits are only likely to increase. In fact, the average monthly Medicare Advantage premium will be the lowest it's been in the past 13 years. That's good news for more than 24 million seniors who are expected to enroll in an Advantage plan for 2020, and it's definitely reason enough for you to consider doing the same.

Why get an Advantage plan?

Believe it or not, Medicare Advantage often offers a wider scope of coverage than original Medicare. For example, original Medicare won't pay for dental cleanings, eye exams to check for vision, or hearing aids, whereas Medicare Advantage generally picks up the tab for these oft-utilized services. Now you're probably thinking: "Well sure, I'll get better coverage, but I'll probably pay more." But not necessarily so. Many Medicare Advantage plans come with competitive premiums and lower copays than original Medicare. And with premium costs going down for 2020, you could save even more.

Here's another perk of Medicare Advantage -- these plans place a limit on out-of-pocket spending on an annual basis, and once you hit that maximum, you won't pay a dime for covered medical services for the rest of the year. Original Medicare doesn't offer that same guarantee, which means that if you stick with it, you could end up draining your retirement savings if your healthcare costs escalate within a given year.

Finally, some Medicare Advantage plans offer overseas coverage, whereas that's not something you'll get with original Medicare. If you do a lot of traveling in retirement, that's huge.

Of course, Medicare Advantage isn't perfect. One major drawback you should be aware of is that with an Advantage plan, you're limited to a specific network of medical professionals that may not be convenient for you. That could become problematic if you spend time in different parts of the country and need more flexibility as far as providers go.

Still, it pays to research your options under Medicare Advantage, especially given the news that premium costs are expected to drop. If you're interested in signing up for an Advantage plan for 2020, you can do so during Medicare's open enrollment period, which begins on Oct. 15 and runs all the way until Dec. 7.

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