What You Need to Know About Medicare Advantage Plans

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If you are age 65 or older and enrolled in Medicare, you have at least thought about whether to enroll in a Medicare Advantage Plan. In fact, as of the end of 2019, one out of every three Medicare eligible individuals was enrolled in a Medicare Advantage Plan. And according to the Congressional Budget Office by 2029 almost half of all Medicare Beneficiaries will be enrolled in Medicare Advantage Plans. While some of this surge in enrollment is due to member satisfaction, the reality is that most of these plans are also significantly less expensive than a Medicare Supplement plus a Part D prescription drug plan, and in many cases will cost the member zero! In addition, because of very generous federal funding, many of these plans also offer additional value-added benefits such as dental, meal delivery and even home healthcare.                 

Whether you are just turning age 65 or have been on Medicare for years, it is confusing! 

You have Part A of Medicare, Part B of Medicare, Part C which isn’t actually Medicare and Part D for your Prescription Drugs.  What does it all mean?

So, the question is: Should you enroll in a Medicare Advantage Plan since it costs less than a Medicare Supplement and may include additional benefits not found in supplements?


This article was written to help you make an educated decision or at the very least, know what questions to ask the insurance agent trying to win your business.

What is a Medicare Advantage Plan?

A quick visit to https://medicare.gov will provide you the following definition of a Medicare Advantage Plan:

“Medicare Advantage Plans are a type of Medicare health plan offered by a private company that contracts with Medicare to provide all your Part A and Part B benefits. Most Medicare Advantage Plans also offer prescription drug coverage. If you’re enrolled in a Medicare Advantage Plan, most Medicare services are covered through the plan. Your Medicare services aren’t paid for by Original Medicare.”

The most important line in this definition is: “Your Medicare services aren’t paid for by Original Medicare”. When you enroll in a Medicare Advantage Plan you are effectively opting out of original Medicare and relying instead on a private health insurance company. 

Confused by Medicare

Medicare beneficiaries who enroll in Parts A and B along with a Medicare Supplement remain in Original Medicare for claim adjudication purposes. Even though the Medicare supplements are issued by private health insurance, claims are governed by Original Medicare. If Medicare covers an expense, it is automatically covered by the supplement to the extent that your choice of supplement covers Parts A and B.

Medicare beneficiaries who enroll in Parts A and B along with a Medicare Supplement remain in Original Medicare for claim adjudication purposes. Even though the Medicare supplements are issued by private health insurance, claims are governed by Original Medicare. If Medicare covers an expense, it is automatically covered by the supplement to the extent that your choice of supplement covers Parts A and B.

But when you enroll in a Medicare Advantage Plan your healthcare may be covered differently.

The Health Maintenance Organization (HMO)

The most important thing that you absolutely must know about the Health Maintenance Organization model is that with three exceptions you MUST get your medical care from providers that are in your network.

The three exceptions are:

  • 1.  Emergency Care
  • 2.  Out-of-Area Urgent Care
  • 3.  Out-of-Area Dialysis

In most Health Maintenance Organization Advantage Plans you will be required to name a Primary Care Physician who will then be responsible for managing all your medical care. Before enrolling in this type of Medicare Advantage Plan you may want to ask about the use of specialists since many of these plans require that your Primary Care Physician make a referral to a specialist.

The biggest problem that I have with the Health Maintenance Organization model is that you cannot simply choose to go out of the network. To really understand how important this is you need only ask yourself this one question:

Nurse helping senior sick man with drinking

Imagine that you have been diagnosed with a very aggressive cancer. You do some research and discover that there is a doctor in another state with the best record of treating this specific cancer. Would you want to get your care from that doctor? 

If you answered “yes” to that question (and who would not want to get their care from the doctor with the best record?) and were enrolled in a Medicare Advantage Health Maintenance Plan (HMO), your only option would be to pay one hundred percent of the cost for that treatment because you you would be out-of-network and as a result would have no coverage! 

The Preferred Provider Organization (PPO) – The Better (only?) Choice!

Like the Health Maintenance Organization, the Preferred Provider Organization does utilize a healthcare network. Unlike the HMO though, with the Preferred Provider organization you can utilize providers outside of your network and still receive benefits.

When choosing to use out-of-network doctors and other providers you will have higher out of pocket costs. As an example, in the plan that my wife and I are on we have a $4200 potential out of pocket if we get our care within the network. But if we choose to get care out of network, the out of pocket costs can be as high as $10,000. I know that $10,000 is an incredibly high potential out of pocket liability but, we can get our care at any provider willing to accept our Preferred Provider Organization.

I don’t know about you but if I were diagnosed with an aggressive cancer or other disease and the best care was with a doctor in another state, I would want to go and I would want my health insurance to help pay for the treatment! And while $10,000 is a lot of money it is a sum that I could more easily deal with than a $100,000 medical bill!

From my perspective, assuming that monthly premiums are equal or nearly equal, I would want to have the freedom to get the best care regardless of where that care may be!

The PPO Network – National In-Network Access

When I first wrote my book The Better Medicare Solution I was completely opposed to any Medicare Advantage Plan, even the Preferred Provider Model. My preferred option for most people was to enroll in the Medicare Supplement Plan F Prime also known as the High Deductible F. Today, the Medicare Supplement Plan G Prime has replaced the Plan F. The reason that I liked that plan for most relatively healthy seniors was simple: the Plan G Prime has reasonable premiums, allows you to use any provider in the country and has a low out of pocket maximum ($2340 in 2020).  A male age 65 (in NC) can get the Plan G Prime for $34 monthly. The least expensive Part D Prescription Drug plan is $17 a monthly. So, for $51 monthly that person would have great coverage and the maximum in healthcare freedom.


In 2019 I discovered that there was at least one Medicare Advantage Plan that allowed members to use providers in their Network anywhere in the country. That meant that if I sought care in another state and the provider was in their network in that state, I would be considered In-network and subject to the lower maximum out of pocket costs.  Since this insurance company has a large national footprint, I felt really good about this choice.  

Beautiful senior woman just discovered the freedom of her Medicare Advantage Plan PPO

Beautiful senior woman just discovered the freedom of her Medicare Advantage Plan PPO

Why Does This Matter?


There are several reasons why this is hugely important. First and foremost, go back to the question about getting the best care for your medical condition even if it is outside of your local network.  A national health insurance company with a large, national network increases your chances of an out of state doctor being in the network and keeping your out of pocket costs low.

But there is another very important issue, especially as we grow older. Like many others over the age of sixty-five, my children live in other states. If I was diagnosed with a terminal illness, I might want to receive care in a facility near one of my children. Having access to physicians and hospitals where I would be considered in-network provides the freedom to be near family.

Other Benefits of Medicare Advantage Plans

Regardless of whether you choose the Health Maintenance Organization or the Preferred Provider Organization model, most Advantage Plans include several other benefits that make enrolling in these plans the better choice.

Dental Benefits: Many of the Medicare Advantage Plans will include benefits for dental work. The plan that my wife and I are enrolled in includes $500 per year in dental reimbursement. There is no dental network, so we can use any dentist. In addition, we get reimbursed actual charges for any covered dental visit regardless of whether it is preventative, basic or major services.

Vision Benefits: Different plans will include different levels of vision benefits but virtually all the plans include a copay for an annual, routine vision exam which would not be covered under Original Medicare.  In addition, many plans provide benefits for frames, lenses, and contacts.  My plan allows $125 annually for glasses or contacts.

Gym Membership: Many Advantage plans include some form of gym membership. My plan includes Silver Sneakers which allows me to utilize the local YMCA at no cost

International Travel Benefits: My wife and I travel outside of the United States one to two times annually and having benefits for emergency room and urgently needed services was an important consideration for us.


Many plans also include benefits for home health care and medically necessary local transportation as well as other benefits.

In Conclusion

First, never make an insurance agent aware of what you know. Allow the insurance agent to make his/her recommendation first, then ask for the agent’s rationale!


If you decide that a Medicare Advantage Plan is right for you check:

  • If the recommended plan is an HMO and not a Preferred Provider Organization ask why? Other than the prescription drug formulary, I can see no reason why anyone should  enroll in a Health Maintenance Plan
  • Can you choose to seek treatment out of your area and still be considered in-network if the provider is in the insurance company’s network in that area?
  • Compare maximum out of pocket costs and primary care copays
  • If you travel outside of the United States, is there a benefit for urgent care or emergency care in other countries?
  • Do not let the “Value-Added” Benefits distract from the medical benefits and out of pocket costs


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