Medicare Advantage has surpassed original Medicare in enrollment, an important milestone for the private plan alternative to government-run health insurance for people over 65.
As of January, 30.19 million of the 59.82 million people with Medicare Part A and Part B, or 50.5%, were enrolled in a private plan, according to an analysis by KFF, a nonprofit focused on health policy, of newly released data from the Centers for Medicare Services. and Medicaid. This is up from just 19% in 2007. Medicare beneficiaries include seniors 65 and older and people under 65 with certain disabilities.
Also known as Part C, the Medicare benefit is administered by private carriers approved by the federal government to provide Part A and Part B coverage. The plans have grown in popularity largely because they provide coverage at a lower cost to many consumers than original Medicare, which is administered directly by the federal government.
Many Medicare Advantage plans have $0 premiums, and in addition to Part A hospital coverage and Part B outpatient coverage, most include Part D drug coverage and some supplemental benefits, such as gym memberships, at no additional charge. (Regardless of their coverage, all Medicare enrollees pay the Part B premium, which is $164.90 for 2023, or more for high-income recipients.) Medicare Advantage plans are often marketed to recipients.
However, Medicare Advantage plans do have trade-offs. Many are organized as HMOs, where patients need to stay within the plan’s network or pay more for care abroad. By contrast, in original Medicare, you could see any doctor in the country who accepts Medicare. While Medicare Advantage plans can be a cost-effective option for the healthy, they can come with significant costs if you get sick or seek out-of-network care. Moreover, many require prior authorization for certain services and referrals to specialists.
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Recipients can switch their coverage each fall during Medicare’s open enrollment period, which runs from October 15 to December 7. While you can always switch from Medicare Advantage to Original Medicare, it’s not always easy to buy a stand-alone Medigap supplement that plans to cover what Original Medicare doesn’t offer. Medigap policies are generally medically insured, which means that outside of certain circumstances and a few states, coverage can be denied based on serious health conditions such as cancer. The inability to purchase a Medigap policy may actually force some beneficiaries to keep their Medicare Advantage coverage even if they are unhappy with it.
Write to Elizabeth O’Brien at elizabeth.obrien@barrons.com