Editor's note: Information in this article has been corrected. All enrollees, in Medicare Advantage plans or original Medicare, pay premiums for Part A and B. 

Medicare Advantage plans are more popular than ever -- for very good reasons. Fully 51% of the eligible Medicare population is enrolled in one this year, per the folks at health information organization KFF. They also report that "The average Medicare beneficiary in 2023 has access to 43 Medicare Advantage plans, the largest number of options ever."

Still, Medicare Advantage plans are not perfect. Here's a look at why you might consider them and why you might not.

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Image source: Getty Images.

Meet Medicare Advantage

When you turn 65, you become eligible for Medicare, and you have some big choices regarding it. For starters, know that what is now referred to by many as "original" Medicare features Part A (hospital coverage) and Part B (physician/medical insurance). Enrollees can also choose to add Part D (prescription drug coverage) and also, perhaps, a private Medigap plan to pay for more of what Medicare doesn't pay.

Medicare Advantage plans, meanwhile, are sometimes referred to as Part C, and you can choose one instead of opting for original Medicare with its Parts A and B. While original Medicare is administered by the federal government, Medicare Advantage plans are offered by private organizations (such as health insurance companies) and are regulated by the federal government. A Medicare Advantage (MA) plan is required to offer at least as much coverage as original Medicare (i.e., Part A and Part B), but these plans often provide more than that, such as vision care, dental care, and/or prescription drug coverage, in order to attract customers.

The advantages of Medicare Advantage plans

Here are some of the key advantages of Medicare Advantage plans:

  • Lower overall cost: An MA plan can be less costly than original Medicare, in total. All enrollees, in MA plans or original Medicare, pay premiums for Part A and B. Most people currently pay about $165 in monthly premiums for Part B and $0 for Part A (if they've paid Medicare taxes while working). An MA plan will charge a premium on top of that, though some plans' premiums are as low as $0. MA plans often feature lower deductibles than original Medicare.
  • Extra coverage: As mentioned earlier, typical MA plans often include vision, dental, hearing, and/or prescription drug coverage at no additional charge. A plan may even offer a free gym membership or other benefits, such as acupuncture or chiropractic care.
  • Capped out-of-pocket spending: Original Medicare will have you paying 20% of many medical expenses, possibly with no limit. If you face a very heavy bill, 20% can amount to many thousands of dollars. (Buying a Medigap plan can prevent such events.) All MA plans cap your out-of-pocket spending, and will pay 100% of expenses once you reach that limit. Until you hit the limit, though, you could end up paying more in co-pays and other costs than you would under original Medicare. For 2023, the out-of-pocket cap is $8,300 for in-network care (and $12,450 for in- and out-of-network care), though some MA plans have lower ones.
  • Simplicity: A single MA plan is likely to be all you need for fairly comprehensive coverage, and that's simpler than opting for original Medicare and adding prescription coverage and supplemental coverage.

The disadvantage of Medicare Advantage plans

Here are some of the key disadvantages of Medicare Advantage plans:

  • A limited network of healthcare providers: Original Medicare gives you access to doctors and facilities across the country. An MA plan will limit you to a certain network of providers and facilities for non-emergency care -- and that network may large or relatively small. (Those in rural areas might have especially narrow networks.) Get care out of network, and you may pay more. If you need or want to see certain specialists in other regions, they will likely be out of network. And the doctors and/or facilities within your network may change over time, too.
  • Prior authorizations needed: You may need to get prior authorization from your MA plan to access certain care, and you may need a referral from your doctor to see certain specialists. This can turn into a big problem if you seem to need a procedure that the MA plan won't approve and pay for. Indeed, it has been reported that some MA plans have often disallowed needed care.
  • Switching can cost you: If you decide to switch back to original Medicare at some point, you can. You'll generally need to do so during the annual open enrollment period, and if you've been on an MA plan for more than a year, you may not be able be able to buy a Medigap policy. If you are able, it might cost more.

Your choice

Clearly, there's no single option that's best for everyone. Some suggest that Medicare Advantage plans are best for those who are relatively healthy and who don't need to see particular doctors or use particular medical facilities. Original Medicare offers a lot more flexibility, but it may not offer you as much coverage as an MA plan would.

Not all MA plans are equal, either. So if you're interested in one, shop around and look up quality and satisfaction ratings for contenders.