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10 Ways Medicare Advantage May Be More Affordable Than You Think

Original Medicare’s Hidden Costs 

While Original Medicare provides many benefits, it can still cost more than expected. Original Medicare levies a $1,600 Part A deductible due from some members before inpatient medical coverage can commence. Original Medicare beneficiaries must also pay premiums for prescription drug coverage (Part D) and occasionally Medicare Part A, depending on their tax status.

Since Original Medicare does not set an out-of-pocket maximum, all members must continue paying their share of Medicare-approved costs regardless of the amount of money they’ve already spent on medically necessary care. Alternatively, Medicare Advantage offers various plan options, many circumventing some or all of these out-of-pocket OM expenses.

1. Lower Premiums 

Original Medicare and Medicare Advantage beneficiaries must pay their monthly Part B premium of $164.90 to retain coverage. However, Original Medicare members who have not worked or paid enough Medicare tax to qualify for premium-free Part A must also pay a $278 or $506 monthly premium relative to their tax record. Furthermore, they would need to pay an additional monthly fee if they desire prescription drug coverage through Medicare Part D.

By comparison, many Medicare Advantage plans offer comprehensive inpatient, outpatient, and prescription drug coverage for reduced rates or no extra charge. According to recent research, 69% of Medicare Advantage enrollees have chosen policies with zero-premium individual coverage. Anybody who meets general Medicare eligibility requirements should qualify for a zero-premium Medicare Advantage plans.  

2. Lower Deductibles 

In 2023, the annual Original Medicare deductible is $1,600 for Part A and $226 for Part B. Once care costs exceed these limits, Medicare must begin paying its share of all eligible medical expenses. Individuals who have opted into Medicare drug coverage (Part D) will pay an additional deductible of up to no more than $505 per year.

Because private insurance companies offer Medicare Advantage plans, out-of-pocket costs like copays, coinsurance, and deductibles will vary from policy to policy. In fact, some types of Medicare Advantage plans will set a $0 deductible and even include complimentary drug coverage. Eligible seniors could save on expenses by switching to a Medicare Advantage policy, garnering broader protections for less money upfront.

3. Flexible Savings Accounts (FSAs) 

Flexible savings accounts (FSAs) allow individuals to store up to $3,050 per year in pretax funds applicable toward out-of-pocket medical expenses like copays, deductibles, and prescription drugs. Qualified withdrawals from these accounts retain tax exemption, saving policyholders on money otherwise lost to taxes.

By agreeing to a high-deductible plan, Medicare Advantage beneficiaries can utilize Medicare-funded savings in similar Medical Savings Accounts (MSAs). Some Medicare Advantage members will also qualify for Medicare flex cards directly linked to their MSAs, offering convenient real-world access to these funds as needed. However, flex card funds only get loaded once per benefit period and are only serviceable toward qualified medical expenses.

4. Prescription Drug Coverage 

Medicare Advantage assists prescription-dependent individuals by frequently including drug coverage for little to no additional premium. Alternatively, Original Medicare members who want drug coverage must purchase it through Medicare Part D.  Though Part D premiums vary by income level, the average monthly rate in 2022 was $32.08. Part D also includes its own copays, coinsurance, and deductibles, with variable rates depending on your selected plan and pharmacy.

Once Part D enrollees spend $4,660 on drugs, they’ll only pay up to 25% of the cost of all prescriptions up to the annual Part D out-of-pocket maximum of $7,400. The average out-of-pocket price of one prescription with Part D in 2018 was $50, meaning that Original Medicare members without Part D coverage could pay four times more for the same product.  

5. Dental and Vision Care 

Other than specific procedures like emergency jaw surgery or cataract removal, Original Medicare excludes most dental and vision care from coverage. Original Medicare beneficiaries who want this specialized care must purchase standalone private policies. Though prices vary widely on a situational basis, average dental insurance premiums cost $360 annually. Standalone vision insurance can start as low as $5.50 per month for minimal coverage.

As with prescription drugs, many Medicare Advantage plans automatically include vision and dental benefits not present in Original Medicare. Depending on their policy, some Medicare Advantage beneficiaries will qualify for services like routine and preventative exams, teeth cleanings, X-rays, fillings, and prescription glasses for no additional monthly premium.

6. Transportation 

Original Medicare generally does not cover transportation outside of medically necessary or emergency ambulatory relocation. Non-emergency medical transportation (NEMT) costs depend entirely on your condition, appointment frequency, and the company you contract. Many companies start with a base rate of around $25 that will increase for wheelchair or stretcher transportation, weekend or holiday service, and extra miles or minutes on the road. Should these expenses meet Original Medicare eligibility, you would pay a 20% Part B coinsurance upon meeting your deductible.

In 2021, 36% of Medicare Advantage plans included transportation benefits. Some of these policies even reimburse rides to healthcare or fitness centers from Lyft or Uber and non-medical transportation services to help buy groceries or visit relatives.

7. Out-of-Pocket Maximums 

Many health insurance policies set a cap, otherwise known as an out-of-pocket maximum, on their members’ annual cost-sharing responsibilities. Once patients reach this limit, their health insurance must pay 100% of all covered costs for the rest of the year. Medicare Advantage policies can set an out-of-pocket maximum no higher than $8,300 in 2023, though some companies may choose an even lower spending cutoff.

Original Medicare does not include an out-of-pocket maximum, meaning that beneficiaries must continue paying copays, coinsurance, and deductibles year-round, regardless of how much they’ve previously spent on care. If you have a condition requiring frequent service that significantly increases medical costs, switching to a Medicare Advantage plan would save you money by absorbing any qualified expenses exceeding your out-of-pocket maximum.

8. Fitness Programs 

Original Medicare alone does not include a fitness allowance, though exceptions occur in some plans with supplemental Medigap coverage. In contrast, most Medicare Advantage plans automatically feature healthy living benefits like nutritious meal delivery and fitness programs. Foremost among these programs, SilverSneakers provides older adults access to fitness classes, yoga, workout equipment, and swimming pools at participating facilities nationwide.

In 2022, 98% of Medicare Advantage members enrolled in plans that offered fitness benefits. For context, gym memberships can range anywhere from $20-60 per month, depending on the facility and included services. Group classes like yoga or pilates can cost $15-40 per session, though rates vary widely by location and instructor. Without Medicare Advantage fitness coverage, seniors who want these benefits could pay hundreds of dollars every year out-of-pocket.

9. Coordinated Care 

Original Medicare allows patients to receive care from any Medicare-approved doctor or hospital in their area. In contrast, Medicare Advantage plans often exist within a healthcare network, meaning that most Medicare Advantage beneficiaries must see doctors listed in their policy to receive full coverage benefits. While this may sound restricting, it does offer a unique savings opportunity.

Medicare Advantage networks usually only grant one yearly screening or test for each eligible condition, whereas Original Medicare may cover repeat examinations. While cost sharing varies based on each procedure, Original Medicare members can typically expect a 20% coinsurance with most X-rays and preventative screenings like prostate exams. Since Original Medicare members qualify for more annual screenings, they may spend more out-of-pocket on coinsurance.

10. Provider Networks 

Medicare Advantage healthcare networks include HMOs, PPOs, POSs, PFFs, or SNPs, each with its own restrictions and benefits. Though your options will be limited, receiving healthcare services within certain Medicare Advantage networks can ultimately help you save money. For example, HMO and POS plans do not require members to pay a deductible and typically charge a minimal copayment for service from in-network doctors.  

Many PPOs include drug coverage, saving members on high out-of-pocket prescription costs. Special Needs Plans (SNPs) tailor their benefits, provider options, and services to appropriately fit the needs of different groups of people with unique conditions. Flexible SNP coverage saves these individuals money by making it more difficult to assume out-of-network charges.

You’re just a few steps away from seeing your Medicare Advantage plan options.

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You’re just a few steps away from seeing your Medicare Advantage plan options.

Find a plan