Medicare

How to Compare Medicare Advantage Plans

Medicare Advantage plans allow you to bundle Part A, B, and D, and may offer additional coverage such as dental or vision. Given the sheer number of plans offered by private insurance companies, however, it’s worth taking the time to research and complete potential plan options. 

How to Compare Medicare Advantage Plans

Medicare’s Annual Enrollment Period is here:

October 15 – December 7

Reevaluate your current coverage to see if it’s still a good fit for you. If not, Medicare beneficiaries can make the following changes during this period:

  • Switch from Original Medicare to Medicare Advantage
  • Switch from Medicare Advantage to Original Medicare
  • Change Medicare Advantage plans
  • Enroll in or drop a Medicare Part D plan
  • Change Medicare Part D plans

 

Still have questions? Learn more about the Annual Enrollment Period and other enrollment periods for Medicare.

There are two main types of Medicare: Original Medicare and Medicare Advantage (MA). The federal government manages Original Medicare, and it includes Part A (hospital insurance) and Part B (medical insurance). You can also opt into a separate Medicare drug plan known as Part D.

Private insurers offer Medicare Advantage, also known as Medicare Part C. These plans are Medicare-approved and act as an alternative to Original Medicare. MA plans include Parts A and B, and may include Part D along with other benefits, including vision, dental, or hearing services.

Given that MA plans are managed and offered by private companies, there are coverage choices available to meet specific patient needs or provide care in certain geographic areas. If you are considering a Medicare Advantage plan, it is worth taking the time to compare your options and find a plan that offers the coverage you need at the price that fits your budget.

1. Determine the Benefits You Need

Before comparing any Medicare Advantage plans, determine what type of benefits you seek. This helps narrow the field since any plans that do not offer what you want are not worth considering.

MA plans offer Part A and B coverage at their most basic. Once you have paid your deductible, copayment, and coinsurance costs, your plan covers the rest of Part A or Part B services, so long as they fall under the scope of your plan. For example, Part A covers inpatient hospital care, lab tests, and surgery. In contrast, Part B covers ambulance services, medical equipment, mental health services, and outpatient treatments.

Most Medicare Advantage plans also bundle in Part D drug coverage along with Parts A and B and may offer additional services such as vision or dental insurance. Keep in mind that if your MA plan is a Healthcare Maintenance Organization (HMO) or Preferred Provider Organization (PPO) that does not include drug coverage, you cannot add separate Part D coverage. However, if your plan is a Medical Savings Account plan or a Private Fee-for-Service plan, you may be able to add Part D.

2. Pick the Network Type

Once you know the coverage you need, the next step is picking the network type that works for you.

Depending on your medical history, budget, and any preferred physicians in your area, different network types may offer a better fit. Networks approach coverage differently depending on the network’s type. For example, some charge more to go out of network for service and others denying coverage entirely if you do not use in-network providers. This could be an issue if your preferred hospital or specialist is outside your MA plan’s network.

At a high level, health networks are groups of general providers and specialists that insurers have recruited to offer health services to patients on the insurer’s plan. Suppose your MA insurer considers Doctor A as in network and Doctor B as not. In that case, your plan may cover services from Doctor A, but you may need to pay for Doctor B completely on your own.

Common Health Insurance Networks at a Glance

PPOHMOEPOPOS
Primary care physicianNoYesNoYes
Out-of-network careYes, partially coveredNoMedical emergencies onlyYes, with limitations
Pre-approval for medical servicesYesYesYesYes

Common types of health care networks include:

HMOs

HMOs limit coverage to providers within the network and may offer little or no coverage for services outside the network, except in case of emergency. In some cases, HMOs may require you to live or work in their service area to offer coverage.

PPOs

PPOs offer reduced out-of-pocket costs for patients who use in-network providers. Other healthcare services can be used at an additional cost.

POSs

In a point of service (POS) plan, you pay less if you use in-network providers. To access a specialist, you need a referral from your primary care physician (PCP). 

As a result, if you have significant medical needs that require regular specialist visits, a POS may not be a great fit for your budget. If you rarely use providers outside your network, meanwhile, an HMO may make sense.

3. Consider Plan Costs and Your Budget

Once you know what you could spend on health insurance each month, comparing the costs of different MA plans is a good idea. For example, some plans offer “zero premium” as a selling point. Under these Medicare Advantage plans, you do not pay a monthly premium for your Part A coverage. But zero premium does not mean free: You may still have to pay your Part B deductible and any out-of-pocket costs associated with care.

Premium

Premiums are the amount you pay every month to keep your insurance active, and you may pay a premium on both Parts A and B. For example, if your plan has a premium of $50, you pay this amount each month. If you have a $0 premium Part A plan with your insurer, they take care of the premium cost. If Part A premiums are not covered, you pay either $274 or $499 per month in 2022, depending on how long you have worked and paid Medicare taxes. In addition, $0 premium plans may not cover your Part B premium. 

Deductibles

Deductibles are the amount you pay before your insurance begins to cover any healthcare services. If you have a deductible of $500, you have to pay this out of pocket to activate your insurance coverage. Typically, MA plans that feature higher deductibles tend to have lower premiums because while you would pay less monthly to keep your coverage active, you would need to pay more once you seek care before your MA plan kicks in for covered services.

Copayments

Copayments are the amount you pay out of pocket for services, and these costs are not covered by Medicare. If you have a $10 copayment for laboratory tests, for example, you pay this amount every time you use this service. Most MA plans have copayments for every doctor’s visit, pharmacy refill, or lab test.

Coinsurance

Coinsurance is a percentage split with your provider for coverage of health services. If your coinsurance is 80/20, your provider pays 80% of service costs (after deductibles and copayments) while you pay the remaining 20% of the cost.

Out-of-network fees

Out-of-network fees are the amount you pay to access services outside your provider network. These fees vary based on your provider and the type of service you are accessing. In some cases, an MA plan may not cover any out-of-network care, meaning you would have to pay for the entirety of the cost.

Out-of-pocket maximum

The out-of-pocket maximum is the most you can pay each year before your insurance covers any remaining costs. The out-of-pocket maximum for MA plans in 2022 is $7,550.

4. Consider Your Local Plan Options

Different plan types may offer a better fit depending on where you live and work. MA plans use health provider networks and many do not cover out-of-network services or charge additional fees to access non-network providers. It is worth ensuring that your prospective provider offers coverage in your area.

For example, if you have no plans to move, a Medicare Advantage HMO that offers coverage in your city could suit your needs well. But if you have a new job lined up or your residence could change soon, enrolling in this type of plan may tie you to a network you cannot use.

Find and compare plans in your area. You can also contact a trusted insurance agent for advice on which local plans may meet your needs.

When it comes to coverage, your Part D formulary should also play a role. The formulary is the list of drugs your MA plan covers, so you should ensure that your recurring medications are covered. While this list can change anytime, your insurance company must notify you of any changes. In addition, all formularies must contain at least two types of drugs per category.

5. Note the Plan’s Overall Reputation and Star Rating

The Centers for Medicare and Medicaid Services (CMS) provide Star Ratings for Medicare Advantage plans. These ratings are designed to help consumers compare plans before their open enrollment periods. Star ratings use a 1-5 scale, with 1-star ratings representing poor performance and 5-star ratings representing excellent performance. These ratings are released annually based on survey data from individuals enrolled in these plans.

Along with Star Ratings, online reputation plays a role in selecting your MA plan. A quick search of your potential insurer will offer insight into customer service, coverage, and complaints, which can help you make your decision.

6. Compare Your Top Medicare Advantage Plan Choices

After you have selected your top choices for MA plans, it is a good idea to create a comparison chart, like the chart below. This will help you visualize what each plan does and does not cover. 

For example, you can list each potential provider along the top of your chart and then create rows for each key feature or drawback. If you are looking for an insurer that offers a premium-free Part A, you could make this a row on your chart and indicate “yes” or “no” for each provider. You can also create rows for: 

  • Network type
  • Monthly premium cost
  • Overall out-of-pocket maximum 

Comparing these factors will help you understand what this plan will cover and how much it could cost over time.

Example Plan OptionPlan Option 1Plan Option 2Plan Option 3
Coverages
Part D drug coverageYes; formulary includes all needed medications
Important benefit 2Yes
Important benefit 3No
Costs
Premium$0; Part B 100% covered
Deductible$3,000
CopaymentsPrescription: $10Doctor visit: $25Specialist visit: $50
Coinsurance30%
Out-of-pocket maximum$6,000
Access
Network accessAll preferred providers in network
Reputation
Star rating4

7. Enroll in Your Medicare Advantage Plan

Once you have selected the MA plan that meets your needs, it is time to enroll in the plan of your choice. When it comes to Medicare Advantage enrollment, you have options for when to enroll:

The Initial Enrollment Period

The Initial Enrollment Period starts 3 months before you turn 65 and ends 3 months after you turn 65. During this period, you can join the MA plan of your choice or join Original Medicare.

The Open Enrollment Period

The Open Enrollment Period occurs each year from October 15 to December 7. You can switch, drop, or join an MA plan during this time.

The Medicare Advantage Enrollment Period

During the Medicare Advantage Enrollment Period, which runs from January 1 to March 31 each year, you can switch to a different MA plan or to Original Medicare. However, you can only switch once during this period.