What Are the Hidden Costs of Medicare Advantage Plans?

New beneficiaries of Medicare often ask: Which type of coverage is best, Medigap or Medicare Advantage? Because each individual’s situation is different, it is important to note that what might be perfect for one person would not work for another. While Medicare Advantage plans, also called Part C Medicare, usually have lower premiums, Medigap plans are easier to comprehend.

In 2016 a report released by the Kaiser Family Foundation indicated that roughly 31 percent of Medicare beneficiaries decided to choose Medicare Advantage. Medicare Advantage plans have either an HMO or PPO network through which members access their healthcare. This allows Medicare Advantage to offer low premiums with some plans having $0 premiums. In choosing Medicare Advantage, members have access to a built-in Part D benefits.

Medicare Advantage plans may also include other attractive benefits, such as routine eye and dental care. But be aware that there are back-end costs in the Medicare Advantage plans. The costs may be minute if you are healthy but could escalate later if you require more care. Therefore, it is a good idea to take the time to find out what to expect out of your chosen Medicare Advantage plan.

The two important areas to examine closely in your Medicare Advantage plan are deductibles and copays. In order to find out more about deductibles for the plans that interest you, first check the Summary of Benefits to see what you are responsible for right up front. Medicare Advantage plans cover the same Part A and B services offered by Medicare, so a careful comparison is to your advantage.

Furthermore, Medicare Advantage members pay copays for medical care. Copays are very common for ER visits, lab work, ambulance trips, x-rays and other services. For example under one plan a beneficiary with a $15 copay at their primary care doctor’s office will pay a $45 copay to see a specialist. The copay amounts vary by plan, thus it is a good idea to research the plan you are choosing before signing up. To help you determine what may be best for you financially, try to calculate what you may spend in an average month on health care. Doing your research before you need to make choices should provide you with the best outcome.