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Comparing Medicare Advantage Plans: A Quick Guide

Shopping for Medicare coverage can be stressful. With the wide array of plans available, it’s not easy to narrow down the choices, and it’s important to find one that covers your personal health care needs.

There are 3,550 Medicare Advantage plans available nationwide in 2021, more than any previous year. The average person has 33 Medicare Advantage plans to choose from in their service area.

To help you find the coverage options that best match your health and financial situations, we’ve put together a guide to comparing 2021 plans.

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What’s a Medicare Advantage Plan?

Most Americans are eligible for the federal government’s health insurance plan when they turn 65. Original Medicare covers medically necessary expenses such as hospital care (Part A) and medical services (Part B). You can also add on prescription drug coverage (Part D) or Medicare Supplement Insurance (Medigap).

Because Original Medicare doesn’t include benefits such as vision, hearing, and dental care, many people buy private insurance plans known as Medicare Advantage (Part C).

These plans are a convenient, all-inclusive approach to health insurance. You can purchase a single policy that bundles:

  • Original Medicare Parts A and B
  • Extra benefits such as vision or dental
  • Prescription drug coverage

Key Things to Consider When Comparing 2021 Plans

Medicare Advantage plans vary greatly, so it’s important to compare coverage and make sure you understand how Part C plans work before enrolling. There are three key things to consider in the context of your needs:

  • How healthcare is delivered
  • Types of benefits provided
  • Costs such as premiums, deductibles, and copays

We’ll break these down in detail below.

1. Types of Medicare Advantage Plans

Private insurance companies offer four main types of Medicare Advantage plans. Each works differently when it comes to the doctors, hospitals, and specialists you can use. However, all Medicare Advantage plans cover urgent or emergency care, as provided by Part A and Part B coverage.

Health Maintenance Organization (HMO)

HMO plans contract with a network of health care providers. Beneficiaries must use providers within the network. If you use an out-of-network doctor or hospital, you usually pay the full cost of services yourself. Look for an HMO-POS plan if you expect to use out-of-network services, as these plans may cover some of these expenses.

With an HMO plan, a primary care physician coordinates your care and refers you to specialists. If your current doctor isn’t part of the HMO plan’s network, consider if you’re willing to switch to another physician.

Private Fee-for-Service (PFFS)

A PFFS plan sets the rates it pays providers for services, as well as your coinsurance or co-payment. You can see any Medicare-approved health care provider that accepts the private insurance company’s payment terms. However, providers may accept the plan on a service-by-service basis, so always check before receiving treatment. Some PFFS plans may have a network of providers that always accept the plan.

You aren’t required to have a primary care doctor with a PFFS plan and can usually see a specialist without a referral.

Preferred Provider Organization (PPO)

Similar to an HMO plan, a PPO plan has a network of health care providers. You can see any Medicare-approved provider you wish, but it’s cheaper to stay within the network and use a preferred provider.

With a PPO plan, you don’t need a primary care physician and can coordinate your own care. In most cases, a referral to see a specialist isn’t required. These plans may be a good fit for those who want to guide their own health care.

Special Needs Plans (SNPs)

SNPs are available to patients who have certain illnesses or health conditions, such as end-stage renal disease, cardiovascular disorders, or HIV/AIDS. The plan’s network providers include doctors and specialists experienced in caring for these high-needs patients.

A primary care doctor or care coordinator is usually required to oversee care and make referrals to specialists. Benefits are also customized to meet health needs.

2. Prescription Drugs and Supplemental Benefits

Prescription Drugs

Nearly 90% of Medicare Advantage plans for individual enrollment in 2021 include prescription drug benefits. Coverage varies, so check the drug formulary to make sure your medication is on the plan’s list before enrolling. You should also confirm which tier your drugs are assigned to, as this affects the cost. You may also be restricted in the pharmacies you can use.

More than half of Medicare Advantage plans with drug coverage have no monthly premium. To compare policies, take into account each plan’s premiums, deductibles, and copays.

Supplemental Benefits

Medicare Advantage plans offer a wide mix of extra benefits, from hearing aids to meal delivery. The most popular benefits are fitness, vision, dental, and hearing — in fact, all four of these are available in more than two-thirds of 2021 plans.

Consider which benefits you plan to use. For example, if in-home support is important, you have less choice because only 6% of plans offer this benefit. If a gym membership would be well-used, look more closely at plans providing a fitness benefit.

Here are the percentages of 2021 Medicare Advantage plans that include extra benefits:
  • Fitness: 96%

  • Dental: 92%

  • Vision: 91%

  • Hearing aids: 88%

  • Over-the-counter items: 75%
  • Meal benefits: 55%
  • Nonemergency transportation: 36%

  • Nonemergency transportation: 36%

  • Bathroom safety equipment: 6%

  • In-home support: 6%

3. Costs

According to the Centers for Medicare & Medicaid Services, the average monthly premium for a 2021 Part C plan is $21 per month, but this figure is weighted with plans with zero premiums. The average 2020 premium paid among Part C plans with premiums was $63 per month.

Medicare Advantage plans come with a myriad of costs. Here are the expenses you need to compare:

  • Monthly premiums

  • Plan B premiums

  • Deductibles

  • Co-payments

  • Coinsurance
  • Out-of-network costs, if you plan to use them
  • Caps on out-of-pocket costs

It takes a little effort to shop around for Medicare Advantage plans because of the diverse ways costs can be calculated. For example, a $0 monthly premium may cost you less upfront but can result in higher cost-sharing when you use a service. If you expect to use a benefit frequently, check to see if it’s more cost-effective in the long run to pay a higher monthly premium and a smaller co-pay when using the services.

Choosing the Right Plan for You

There’s no single health plan that can meet every patient’s needs. The right Medicare coverage depends on your personal circumstances, the health care providers you wish to use, the type of benefits you need, and your budget.

Here are a few tools to help you decide.

1. Medicare Planning of America Plan Finder

Shop around for Medicare Advantage plans using the plan finder on our website. You can compare premiums, co-pays, and benefits for plans in your service area.

2. Star Ratings

Compare the star ratings of different plans to get a sense of how satisfied beneficiaries are. Medicare Advantage health plans are rated for quality on a scale of one to five by the Centers for Medicare and Medicaid Services, based on patient experiences. One star is considered poor and five stars excellent.
More than three-quarters of beneficiaries in Medicare Advantage health plans with drug coverage will be in four- or five-star plans in 2021.

3. Licensed Insurance Agent

Draw on the expertise of a health insurance broker such as Medicare Planning of America. We provide personalized assistance and answer any questions you may have to help you find a Medicare Advantage health plan that works for you.

Our free quote comparison brings together Part C policies from top insurance companies, making it simple and hassle-free for you to shop around.

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