One of the most controversial aspects of Medicare is the ability to choose between original Medicare and Medicare Advantage.
Some of the controversy is ideological, because some people are philosophically inclined to either favor or oppose Advantage plans. But much of the controversy exists because the right choice depends a lot on individual circumstances and preferences. The better option for one person might not be good for another person.
Make a systematic review of the key factors and determine whether original Medicare or a Medicare Advantage plan is the best for you.
In many areas, the choice is more difficult because there are multiple Medicare Advantage plans available. You first need to compare the different Advantage plans and decide which might be the best for you. Then, compare that plan to original Medicare (combined with Medi-care Supplement and Part D Prescription Drug policies) and decide which is the best fit for you.
Remember that you can change the decision each year during Medicare Open Enrollment (sometimes called Open Season). Because plans and costs change each year, I recommend that you revisit the decision annually.
Cost should be only one factor, but Advantage plans usually are less expensive to you than similar coverage under original Medicare. As I said in the previous article, to have adequate coverage under original Medicare, you also should purchase Medicare supplement and Part D Prescription Drug policies. All that coverage will be bundled in an Advantage plan for one premium, plus some level of vision and dental care usually is included.
An Advantage plan also has a cap on your annual out-of-pocket expenses for covered care. A major trade off is an Advantage plan only covers care by providers in the plan’s network. While most people think this limit ap-plies only to doctors, it is much broader. Network providers include hospitals, nursing homes, rehabilitation facilities and more.
In original Medicare, you select the doctor you want. Your doctor, or you, in tandem with the doctor, decide the hospital at which surgery will be performed and the nursing home/rehabilitation center you’ll enter after surgery.
With an Advantage plan, however, you choose from the plan network. It is not unusual for an Advantage plan to have only one hospital or nursing home in the network within a certain geographical area. The provider restriction is most likely to come into play when you have a serious condition and decide you want the best providers, at least the best in your area, for that condition. Care they provide isn’t covered if they’re not in the plan’s network.
There’s some research that indicates in about one-third of Advantage plans, people who become sicker are more likely to switch from an Advantage plan to original Medicare. They probably believe the plan’s provider network isn’t getting the job done or they want to be treated by particular specialists who aren’t in the network. On the other hand, Advantage plan members are more likely to receive preventive care and some studies show Advantage members are healthier and live longer.
The bottom line is you need to care-fully review all the medical providers in an Advantage plan’s network. Imagine yourself in need of different types of treatment and see what your options would be under the plan. Also, review the restrictions on care received when you are out of town. Original Medicare covers you throughout the United States.
An Advantage plan might only cover emergency treatment received outside your home area, require advance approval for care, or have other restrictions. Neither original Medicare nor Medi-care Advantage plans provide coverage outside the United States.
Of course, you can change coverage during Open Enrollment. You can switch from one Advantage to another or from an Advantage plan to original Medicare. You also can switch from original Medicare to an Advantage plan. Open Enrollment is from Oct. 15 to Dec. 7, and the decisions are effective the following Jan. 1.
There’s also a special enrollment period during the first three months of the year when Advantage plan members can switch to another Advantage plan or to original Medicare.
But keep in mind that if you want to change from an Advantage plan to original Medicare, your Medicare supplemental policy options might be limited. When you first sign up for Medicare or within 12 months of first signing up for an Advantage plan, you are guaranteed to be able to buy the supplemental policy of your choice.
But after that, in most states the guaranteed ability to buy a supple-mental policy might be more limited or nonexistent. You’ll have to answer questions about your health history and might be denied a policy or charged a higher premium based on your health history.
This restriction is especially problematic if you might move sometime during the Medicare years or if you decide after a few years that you don’t like Advantage plans. The choice between original Medicare and Medicare Advantage can be one of the most consequential decisions of retirement. Consider all the factors and the long-term as well as the short-term.