In recent years, growing inflation has taken a significant toll on older Americans with fixed incomes, sparking financial worries among this age group. Though inflation has slowed through 2023, a recent survey by AARP found that 40% of adults ages 60 and older still worry about having enough money to cover healthcare costs or health insurance.
Even so, millions of older adults are missing out on opportunities to reduce health insurance expenses. One way for Medicare beneficiaries to potentially save money is by enrolling in the right Medicare Advantage Plan. Read on to learn how Medicare Advantage can help you cut costs for healthcare and insurance.
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Why Enroll In Medicare Advantage?
Medicare Advantage, also called Medicare Part C, offers the same benefits as Original Medicare, plus added coverage in many cases. Because Medicare Advantage Plans are available for purchase through private insurers, their premiums and coverage terms vary. Still, many Medicare-eligible Americans opt for Medicare Advantage Plans for the following reasons:
- The monthly premium for a Medicare Advantage Plan usually includes prescription drug coverage (Medicare Part D).
- Many Medicare Advantage Plans include dental and vision coverage, along with wellness programs.
- Medicare Advantage often costs around the same as Original Medicare.
- Medicare Advantage Plans commonly have lower copays than Original Medicare.
Cost-Saving Features to Know
Because Medicare Advantage Plans come from private insurers, you might assume they’re more expensive. However, many beneficiaries pay less for Medicare Advantage than they would for Original Medicare. Explore a few of Medicare Advantage’s cost-saving features below.
$0 Monthly Plan Premiums
Medicare Advantage Plans usually offer more benefits than Original Medicare, and those benefits often come at no extra cost. In fact, nearly three-quarters of Medicare Advantage enrollees have plans that include prescription drug coverage with $0 premiums. They are only required to pay their Part B premium, which usually costs around $165 per month.
In comparison, most Original Medicare enrollees must pay the Part B premium, plus an extra monthly premium to get Part D prescription drug coverage. Premiums for standalone Part D plans cost about $40 per month on average.
Over-the-counter (OTC) Allowances
In addition to prescription drugs, Medicare Advantage can save you money on over-the-counter medications through an OTC allowance or benefit. Enrollees can use their OTC allowance to purchase first aid items, pain relief medications, supplies for dental care, and cold and allergy treatments, among other necessities.
Most Part C plans include some sort of OTC benefit, but details vary among plans and providers. Medicare Advantage Plans typically administer OTC benefits each quarter, and allowances do not roll over from quarter to quarter.
Part B Giveback
Some Medicare Advantage Plans feature a Part B giveback benefit, which can help reduce your monthly premium for Medicare Part B. If your plan comes with this benefit, your Medicare Advantage carrier should subsidize or reimburse you for a portion, if not all, of your Part B premium.
Like many other Medicare Advantage Plan features, Part B giveback benefits vary by plan and carrier. Your giveback may cover as little as a few cents or as much as $164.90 (the entire standard Part B premium) each month.
Additional Benefits Can Lower Your Overall Costs
Per enrollee, Medicare Advantage Plans receive approximately $2,350 more than they pay for Medicare-covered health services. This surplus enables Medicare Advantage to provide more benefits than Original Medicare, often including dental, vision, and hearing coverage.
Original Medicare does not cover most dental care, with limited exceptions allowed for certain dental services provided during hospitalization. If you receive medically necessary dental care as part of a cardiac procedure, an organ transplant, or another Part A-covered service, Original Medicare may pay for this care. Otherwise, you’ll have to pay for all dental services out of pocket.
On the other hand, 98% of Medicare Advantage enrollees with individual plans have dental benefits, which may cover preventative services, procedures, and dentures.
Approximately 12 million people 40 years and over in the United States have vision impairment, including 1 million who are blind, 3 million who have vision impairment after correction, and 8 million who have vision impairment due to uncorrected refractive error.
Original Medicare enrollees must pay for all routine eye exams, glasses, and contact lenses 100% out of pocket. Of Medicare Advantage individual plan enrollees, more than 99% receive coverage for eye exams, glasses, or both.
Hearing loss is unfortunately common for many older Americans. 30–35% of adults between the ages of 65 and 75 years and 40–50% of adults 75 and older suffer from hearing loss. Original Medicare does not provide any hearing coverage. Comparably, virtually all Medicare Advantage enrollees receive hearing benefits, including coverage for routine exams and hearing aids.
Other Considerations For Affordable Medicare Advantage Plans
To save on healthcare expenses with Medicare Advantage, you must stay on top of your health situation and plan’s details. Keep the following in mind to get the most out of your Medicare Advantage Plan.
- Your current and upcoming health needs: Determine the types of health services and prescription drugs you anticipate needing now and in the future. Are dentures on the table? What about bifocals? Understand your own health needs before choosing a Medicare Advantage Plan to ensure you have coverage for the products and procedures you’ll require.
- The provider network: When evaluating a plan’s coverage offerings, remember to review its provider network. Ensure you can continue with your preferred providers, pharmacies, and products.
- Deductibles: Medicare Advantage deductibles vary by plan, so if a plan’s coverage offerings seem too good to be true, make sure to check its deductible.
- Out-of-pocket maximums: Once you hit your plan’s out-of-pocket (OOP) maximum, you should receive full coverage for all covered medical services for the rest of the year. When evaluating a Medicare Advantage Plan, consider the likelihood that you’ll reach its OOP max.
- Work with an insurance agent or broker: Insurance agents and brokers can help you choose the most robust and cost-effective Medicare Advantage Plan by comparison-shopping based on your individual needs.
What This Means For You
With the right Medicare Advantage Plan, you can save money on prescription drugs, copays, and even your Part B Premium, not to mention dental, vision, and hearing care. As rising inflation drives uncertainty among older Americans about their ability to pay for healthcare, you cannot underestimate the power of cost savings. An affordable Medicare Advantage Plan can go a long way in helping you feel more financially secure.