Healthcare is always a hot topic, both for investors and for those who need health coverage. With Medicare's open enrollment period quickly approaching, millions of seniors will soon find it's time to elect their coverage for the upcoming year. If you're used to original Medicare, you may be gearing up to choose your Part D plan and brace for the possibility of a Part B premium increase. But there may be a better option to consider -- a Medicare Advantage plan.
Medicare Advantage is an alternative to traditional Medicare that serves as your all-in-one health plan (as opposed to original Medicare, which consists of several distinct parts). It may help to liken Medicare Advantage to the health insurance you had during your working years, where you're entitled to certain benefits that can vary based on the plan you choose. Each Medicare Advantage plan sets its own rules but must provide at least the same level of coverage as original Medicare. But there are certain benefits to choosing an Advantage plan that you should know about.
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1. A wider scope of coverage
Original Medicare doesn't cover a number of important services for seniors, like dental care, hearing aids, and vision checks and eyewear. One major perk of Medicare Advantage is that these services are typically covered, which means you won't need to pay for them completely out of pocket. Some Advantage plans offer additional perks like wellness programs and nurse hotlines, which give you perpetual access to care.
2. Lower premiums
You'd think that a wider scope of coverage would translate into added costs for you under Medicare Advantage, but that may not be the case. In fact, you'll often pay a lower premium for Advantage than you will for Part B under original Medicare. And in some cases, you can even snag a zero-premium plan. Furthermore, whereas you'll be on the hook for deductibles under traditional Medicare, some Advantage plans are deductible-free.
3. Maximum out-of-pocket limits
With original Medicare, it's hard to know how much money you'll spend on healthcare each year. If you wind up needing a lot of services or several hospital stays, your costs could easily skyrocket. One major benefit of Medicare Advantage is that it sets a limit for what you'll be required to spend for your healthcare. Once you hit that limit, you won't pay anything for covered medical services until a new year kicks off.
4. Coverage overseas
Original Medicare doesn't offer overseas coverage, which often proves problematic for seniors who travel abroad frequently. Some Advantage plans, on the other hand, do over health coverage outside U.S. soil.
But beware the drawbacks, too
Though there are plenty of good reasons to choose Medicare Advantage over traditional Medicare, you should be aware that with Advantage, you're limited to what could be a somewhat narrow network of providers. Go out of network, and your Advantage plan most likely won't pick up the tab for the costs you incur. Original Medicare, on the other hand, is a nationwide program and as such has an extensive number of providers for you to choose from. That's a good thing if you tend to travel domestically or split your time between two parts of the country.
Also, be aware that not all Advantage plans are created equal. You'll need to explore your options and see if there's a specific Advantage plan that makes sense for you.
If you do decide to move over to a Medicare Advantage plan, you can do so during Medicare's upcoming open enrollment period. It runs from Oct. 15 through Dec. 7 each year. Furthermore, if you sign up for an Advantage plan during open enrollment and wind up unhappy with your choice, you can switch from one Advantage plan to another during the Medicare Advantage open enrollment period of Jan. 1 through March 31, or even revert back to original Medicare if you decide that's the right way to go.
