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How to Compare Medicare Advantage Plans

by David Bynon, last updated

MedicareWire is the only website that lets you quickly and easily see all Medicare Advantage plans in your area and download plan benefits and costs. Use our MA Plan Finder to compare plans.

This article will answer these important questions about Medicare Advantage plans and many more:

Medicare Advantage plans bundle Medicare Part A, Part B, and usually Part D. Plans generally have lower premiums than Medicare Supplements (Medigap), but out-of- pocket costs may be hight than Original Medicare. There are Medicare Advantage plans for people who also qualify for Medicaid, and many retirees have benefits that help pay various Medicare Advantage costs, including premiums and copays. Plus, most plans offer extra benefits that Original Medicare doesn't cover, like routine vision, hearing, and dental care, as well as popular wellness programs. Read How to Compare Medicare Advantage Plans to see if Medicare Advantage is right for you.

Some Medicare Advantage plans offer a zero-dollar monthly premium because what Medicare pays the plan, plus your Medicare Part B premium, cover the full cost. For healthy people who want to keep their monthly costs low, these plans are an attractive option. But, just be aware that the premium is not the only cost. Plans also have copays or coinsurance you must pay when you use services. To learn more about free Medicare Advantage plans, read Why are Some Medicare Advantage Plans Free?

The primary benefit of Medicare Advantage is extra benefits. And, if you are a healthy senior, the additional benefits and cost savings really add up. But, there are some serious disadvantages as well, including network provider limitations, costly inpatient copays, and no coverage traveling away from home. To discover all of the pros and cons, read: What are the Advantages and Disadvantages of Medicare Advantage Plans?

Here's who gets to truly experience the advantage private health plans offer:

  1. People with retiree benefits that help with Medicare Advantage premiums, deductibles, and copays.
  2. People who qualify for a Medicare Advantage Special Needs Plan.
  3. People who are exceptionally healthy and rarely use healthcare services outside of their annual wellness visits.
  4. People who can't get a Medicare supplement due to one or more chronic health issue who need the maximum out-of-pocket cost safety net built into Part C plans.
If you fall into one of the above categories, then yes, these plans really are an advantage and you should compare plans in your area with our free plan finder tool.

Comparing Advantage Plans: The Basics

Health insurance in America is complex, and insurance companies don’t always make it easy regarding private Medicare coverage.

The good news is that there are four solid metrics you can use when you compare Medicare Advantage plans:

  1. Star Ratings. Each year CMS grades each plan using a 5-star rating system. The star ratings help members understand the quality of care and service they can expect.
  2. Copayments, Coinsurance, and Deductibles. Every service has its own costs that the member pays when they use the service. These costs are spelled out in a plan’s summary of benefits document. MedicareWire shows the summary of benefits information on all Medicare Advantage plan pages.
  3. Maximum Out-of-Pocket (MOOP) Cost. The out-of-pocket maximum is the most you will pay in a calendar year on copays and coinsurance (when you use network providers) before the plan begins paying 100 percent of the costs. It does not include your monthly premiums or prescription drug (Medicare Part D) costs.
  4. Monthly Premiums. When you join a Medicare Advantage plan you will pay the plan’s premium and your Medicare Part B premium. Some plans have a zero-dollar premium, which simply means the Part B premium covers the full cost of the private health plan.

Remember, Medicare Part C combines your Part A and Part B options and optionally provides Part D drug coverage, as well. It’s called Medicare Advantage because, in most cases, plans bundle extra benefits. Be mindful of the fact that the insurance plans set service limits on additional benefits and they may require you to get referrals. In most cases, particularly with an HMO and some PPO plans, the insurer will require you to use the plan’s network of providers. This is how they control costs.

Find Plans in your area with your ZIP Code

To help you make the best choices possible, here are seven tips that will make finding the best Medicare Advantage plan easier.

Tip 1: Compare and Research Annually

The single biggest mistake we see every year is seniors staying with the plan(s) they enrolled in the previous year, or several years ago. This can be a very costly mistake.

Plans change from year to year. With each new plan year carriers are allowed to update their monthly premiums, the formulary (drug list), deductibles, and more. Plus, the plan’s quality rating changes, which we’ll get to next.

In short, if you don’t compare your current plan’s premiums, deductibles, and coverage with its competitors, you could be leaving a lot of money on the table. This is particularly true if you are enrolled in a brand new plan. New plans are notorious for raising premiums and switching around their formularies after getting seniors to enroll.

Tip 2: Look at the Quality Ratings

Each year the Centers for Medicare and Medicaid Services (CMS) publishes a summary 5-star rating on each plan’s previous year’s performance. Most people never look past the summary rating, but we feel it’s important to do so.

The summary rating is based on a number of important factors that will give you a pretty good idea of what you can expect from a particular plan. For health plans CMS rates how the plan manages:

  • Staying Healthy: Screenings, Tests, Vaccines
  • Managing Chronic (Long Term) Conditions
  • Member Experience with Health Plan
  • Complaints and Changes in Plans Performance
  • Health Plan Customer Service

Drug plans are similar. CMS evaluates:

  • Drug Plan Customer Service
  • Complaints and Changes in the Drug Plan
  • Member Experience with the Drug Plan
  • Drug Safety and Accuracy of Drug Pricing

On MedicareWire.com plan pages, we publish a breakdown of the summary ratings, in the categories listed above, so you can see how well a plan performs in the areas that are important to you.

By the way, plans that receive an overall rating of four to five stars get extra money from the government to spend on the healthcare of the plan’s members. HINT: that means better healthcare for you if you join one of these plans.

Tip 3: Know Your Prescriptions

We don’t need to tell you that the cost of medications is going up. Changes in the healthcare laws made some small improvements, yet what we pay out of pocket every year seems to outpace the cost of living increases by a large margin.

There are a number of factors that will change what you pay at the pharmacy. Your prescription dosage, prior authorization restrictions,  step-up therapy requirements, co-payments, co-insurance, the pharmacy you use, and a myriad of other factors mix together to change what you pay for your prescriptions versus what your neighbor pays. This is why knowing everything about your prescriptions before attempting to choose a Medicare plan is critical.

The fact is this. Your unique combination of drugs, dosages, pharmacies, and more will change what you pay. As a result, finding the best Medicare Advantage or Medicare Part D plan for you could save you hundreds, even thousands, of dollars.

Find Plans in your area with your ZIP Code

Tip 4: Be Willing to Switch Pharmacies

The Walgreen’s down the street might be more convenient, but the CVS on the other side of town or your local grocery store could save you a wad of cash. The reason for this is simple: plans negotiate preferred pharmacy contracts, and they change over time.  As a result, not only do you need to shop the plan with the best prices on the drugs you take, you also need to shop the lowest price at each pharmacy.

The bottom line is that you may need to use a different pharmacy to get the best price.

Tip 5: Call Your Doctor’s Office

Your doctor’s office knows what plans they accept, including the plans they are dropping and adding in the new year. So, give them a call and ask to speak with the billing department. This will help you narrow plans to those your favorite doctor accepts. Otherwise, you could be looking at finding a new doctor.

Tip 6: Look at the Cost of Seeing Your Doctor

So far we’ve put emphasis on your medications. For most seniors, this is what appears to have the most impact. However, seeing your doctor or making an emergency room visit could take a bite out of your budget if you choose the wrong health plan.

This is why we publish what each plan charges for basic inpatient and outpatient services. In general, we feel that a co-payment (fixed amount) is better than a coinsurance (percentage of the cost). With a co-payment, you will always know exactly what you owe when you see your doctor or visit the emergency room. With coinsurance, you could be looking at a bill for up to 20% of the actual cost.

Look for the cost breakdown on our Medicare Advantage plan pages.

Tip 7: The Best Medicare Plan Might be Medigap

If you are enrolled in Medicare Advantage (Part C of Medicare), or you’re considering it, chances are it’s due to cost and your budget. We understand. But, maybe there’s an alternative you should consider.

Medicare Advantage is managed care health insurance that’s based on the level of risk to both you and the carrier. For you, the risk is what you will pay out-of-pocket before the plan begins to pick up the entire tab. This is called the Maximum Out-of-Pocket amount, or MOOP. For the 2024 plan year, the highest MOOP a plan can have is $8,550.

Here’s an interesting and important fact. According to recent Kaiser Family Foundation research, nearly 50% of all seniors with a Medicare Advantage plan have a plan with a $8,550 MOOP. That means if you regularly see a specialist for a chronic condition or have an injury or illness that puts you in the hospital, you’re likely to be pulling $8,550 out of your pocket before the plan takes over.

If you can afford this risk, there’s a Medigap plan that offers complete health care flexibility and kicks into 100% coverage when you’ve reached $5,880 in annual out-of-pocket costs. It’s Medigap Plan K, and it’s worth looking at as an alternative, particularly if your Medicare Advantage plan options are limited.

More Things to Consider When Comparing Plans

If you choose a Part C plan you will remain in the Medicare program, however, you give up your normal Part A and B coverage. You continue to have Medicare rights and protection, and you can switch back to Original Medicare later if you decide the Part C plan does not suit your needs.

Be aware that Part C plans are specific to each state and county. You must reside in the prescribed service area of the plan you wish to join. If you have End-Stage Renal Disease, in most cases you will not be permitted to use a Part C plan.

Medicare Advantage is not overly complicated once you understand the basics. However, before you choose health care insurance, make sure you have a full understanding of both the coverage and premiums.

How Do Chronic Health Conditions Affect How You Should Compare Plans?

If you have one or more chronic health conditions that require frequent medicare care, there are several factors to consider:

  1. Do you qualify for Medicaid? If you qualify for Medicaid you should look for a Medicare-Medicaid plan or a Special Needs Plan. These plans will assist you with copayments, making Medicare Advantage more affordable.
  2. Do you have Medicare Advantage retiree benefits? If you’re not sure, ask your company’s benefits coordinator. Retiree health benefits could make the difference between affordable and unaffordable costs.
  3. Are you turning age 65? Serious chronic health conditions can be very costly, and private insurance companies know it. But, when you first get your Medicare benefits at age 65 you have a very narrow window of time to buy a Medigap plan without being turned down. This is your Medicare supplement guaranteed-issue right. Keeping your Original Medicare private-fee-for-service (PFFS) coverage, and adding a Medigap policy, is generally considered the best coverage option for people with serious health issues.

There are many different types of Medicare Advantage plans, but if you have chronic health issues, Medicare Advantage can be very expensive. Without additional help from an employer or Medicaid, medical care can drive the average person into personal bankruptcy.

The alternative is Medicare supplement insurance. While the monthly premiums on Medigap policies might seem high, they are nothing compared to the out-of-pocket maximums on most Medicare Advantage plans.

How Do Benefits Influence Medicare Advantage Plan Costs?

It’s important to consider a plan’s extra benefits and how well they match your health care needs. Each additional benefit is factored into the Medicare Advantage plan cost. You may not see it in the monthly premium, but it will definitely be in the total cost.

Do you need prescription drug coverage? Most people do. Medicare prescription drug plan that’s bundled with an Advantage plan may cost less than Original Medicare plus a stand-alone Medicare Part D plan. You’ll need to check the Medicare Advantage plan’s list of covered medications, called a formulary, to see if your prescriptions are covered at a favorable cost to you.

Many Medicare Advantage plans include routine dental, vision, and hearing benefits. Look into what these services would cost you through a stand-alone plan. You may find that the stand-alone option costs less or gives you better coverage.

An increasing number of plans now offer additional benefits such as transportation to and from doctor visits, over-the-counter medications and supplies, and gym memberships, like SilverSneakers. If you use these services, the savings may offset other Medicare Advantage plan costs. It all depends on what you use and the out-of-pocket costs of those services.

Find Plans in your area with your ZIP Code

Citations & References

medicare.gov

cms.gov

kff.org

youtu.be

This article was written by David Bynon and was last updated on .

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