In 2022, 48% of Medicare beneficiaries were enrolled in Medicare Advantage plans instead of original Medicare, and experts predict that number will be higher in 2023. Medicare Advantage plans are offered by private insurers and bundle Medicare benefits in a way many people find appealing – but they also limit care to network providers, often require pre-approval to see specialists and can saddle beneficiaries with high out-of-pocket costs for serious conditions. The number of older adults in Medicare Advantage is also notable because financial experts tend to recommend original Medicare with medigap.
So why do so many people turn to Medicare Advantage for their health care in retirement? Here are the main factors.
In 2023, 66% of Medicare Advantage plans with prescription drug coverage have no premium – versus medigap, which has a monthly premium. If you have no health issues, the choice can seem like a no-brainer. It is important to note that Part C may not have a monthly premium however you are still responsible for your Part B premium.
With original Medicare, people must juggle individual pieces of coverage – Part A, Part B, Part D, medigap – but Medicare Advantage offers one-and-done simplicity: There’s one premium for everything.
Many Medicare Advantage plans offer additional benefits , such as money toward dental or vision care, which isn’t covered by original Medicare. About 1 in 4 people say extra benefits pushed them to choose Medicare Advantage, according to a survey by the Commonwealth Fund, a health care think tank.
Many older adults choose a Medicare Advantage plan because someone they know chose one.
In addition to being prolific, the ads are increasingly misleading. Growing complaints about Medicare Advantage advertising have led the Centers for Medicare & Medicaid Services to now require that insurers get approval from federal regulators before airing television ads.
