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Want to Save Money on Health Insurance? Three Reasons to Choose Medicare Advantage or Supplemental Policy

By Leah Marianne Klett,

Let’s face it. The world of health insurance is confusing -- and it seems to only get more complicated the older you become. With numerous healthcare options available, it can be difficult to know which plan is best for you.

If you’re 65 or older, chances are you’re considering your Medicare options. As a Medicare Beneficiary, you are charged for additional expenses like copays, coinsurance and deductibles. The costs add up quickly; it’s estimated that the average 66-year-old couple is expected to spend nearly 60% of their Social Security income on medical bills alone.

Fortunately, there is hope.

A Medicare Advantage, Part D or Supplemental policy, sold by private companies and approved by Medicare, can help pay for those things and may reduce your out of pocket costs, thus minimizing your expenses while maximizing your coverage.

The best part? You may qualify for these plans at no additional cost beyond the Part B premium you are already paying now. Here are three advantages to signing up for a Medicare Advantage or Supplemental policy.

Medicare Advantage Plans Saves Money

One of biggest perks of Medicare Advantage (MA) plans is the peace of mind they can bring when it comes to out-of-pocket expenses.

As a lower cost alternative to Original Medicare -- which is run by the federal government --  MA plans have become increasingly popular in recent years and now account for more than 30% of the Medicare market. According to a 2016 survey by the Kaiser Family Foundation (KFF), the growth in enrollment has occurred despite reductions in payments to plans enacted by the Affordable Care Act of 2010 (ACA).

MA plans are growing in popularity for good reason. KFF found that the total cost for traditional coverage might run about $350 a month, while MA plans may cost $135 a month for comparable coverage, making such plans significantly more cost-effective.

While you pay the Part B premium with both options, additional premiums with an MA plan typically cost 60% less than traditional Medicare, according to KFF, yet cover all of the services of Original Medicare, and then some. The average MA monthly premium for a health maintenance organization (HMO) plan (the most popular MA offering) is just $28 a month.

However, it is possible to pay as low as $0 a month. Nearly 60% of enrollees are in zero-premium options, defined as “plans that charge no additional premium for coverage, other than the monthly Part B premium.” By law, MA premiums are not influenced by age, health status or the method by which a consumer signs up.

Additionally, MA plans to set a limit on the maximum amount you will have to pay out-of-pocket. While these caps vary from plan to plan, they typically range from about $3,000 to $6,700 (the legal maximum).

Once you’ve spent that maximum amount, you won’t be responsible for the covered services for the remainder of the year. In contrast, Original Medicare does not offer an out-of-pocket cap, so your expenses are limitless and could end up being significantly higher.

Medicare Advantage Plans Cover Additional Services

Despite being a cheaper alternative, MA plans are required to offer everything that’s covered under Original Medicare, Part A (Hospital Insurance) and Medicare Part B (Medical Insurance), and offer all of the same Medicare rights and protections.  

However, most MA plans include other benefits as well, such as prescription drug coverage, dental, and vision. Some plans offer emergency coverage if you travel abroad, health-club memberships, and other perks not covered under Original Medicare.

Prescription drugs can be extremely expensive -- and Original Medicare doesn't cover prescriptions unless you pay extra to add Part D coverage -- about $33.50 extra a month. By contrast, about 82 percent of Medicare Advantage plans include drug coverage, according to the KFF.

Additionally, Medicare Advantage Plans can't charge more than Original Medicare for certain services like chemotherapy, dialysis, and skilled nursing facility care. Fortunately, you can join a Medicare Advantage Plan even if you have a pre-existing condition.

“Medicare Advantage can be attractive because it may have a very low monthly premium and there may be low or no co-payments for certain types of services,” says Fred Riccardi, director of client services for the Medicare Rights Center, a non-profit that helps people access affordable health care.

Medical Advantage Plans Come Bundled

As earlier stated, health insurance can be confusing -- and with Original Medicare, a Part D drug plan, and Medigap you have multiple cards, stacks of paper, and monthly bills to track. For those hoping to simplify their lives, MA plans are a significantly more cohesive, easier option.

Most Medicare Advantage plans bundle health insurance and drug coverage together to give you everything in one convenient plan. According to statistics, nearly 90% of MA plans come bundled with a Part D drug plan, which gives you complete Medicare coverage in a single package.

Switching to a Medicare Advantage plan is a great option for those who value convenience when it comes to their healthcare coverage.

Is Medicare Advantage or Supplemental Policy Right for You?

Do you want to save money? Do you want to minimize healthcare costs while maximizing coverage? Do you want all of your Medicare coverage in one plan? If you answered “yes” to any -- or all -- of these questions, an MA plan or supplemental policy is the right option for you.

To get your free Medicare Guide, click here.