Thinking Of Saving Money By Switching To Medicare Advantage? Here's What You Need To Know Before You Make The Switch

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If you are newly enrolling in Medicare or are unhappy with traditional Medicare's out-of-pocket costs, you should take a close look at switching to a Medicare Advantage plan. These plans are administered by private insurance companies who receive Medicare funding from the government, allowing them to offer low premiums and pass the savings to you. The out-of-pocket costs of traditional Medicare, such as the 20% coinsurance and the prescription drug coverage gap, are often much higher than what you will experience by switching to a Medicare Advantage plan. If you're thinking about switching, here are the two most important considerations to keep in mind when choosing the perfect plan for your medical needs.

Does Your Current Doctor Accept Medicare Advantage?

Most Medicare Advantage plans save on costs by adopting the traditional HMO or PPO models of private medical insurance, meaning that they are limited to network coverage, rather than traditional Medicare's nationwide program. This allows Medicare Advantage plans to negotiate prices with regional providers in order to strike a better deal than traditional Medicare; the cost savings are passed on to you, which is why Medicare Advantage plans often provide less out-of-pocket costs.

One of the consequences of this is that you will need to check with your doctor's office to see which, if any, Medicare Advantage plan the doctor accepts. Once you find a list of prospective plans that are accepted by your doctor, you'll want to look up the network information for those plans online to make sure that you are happy with the coverage in your area.

Are Your Prescription Drugs Covered?

Traditional Medicare (Parts A and B) has poor coverage of prescription drugs, and Medicare Part D has a coverage gap (commonly referred to as the "donut hole") in which Medicare Part D stops paying for prescription drug coverage after you have exhausted the initial out-of-pocket limit and before you have reached the catastrophic out-of-pocket limit. This can be difficult to navigate, and Medicare Part D insurance can leave you on the hook for thousands of dollars paid out-of-pocket once you enter into the coverage gap. You certainly never want to be subjected to making decisions about fulfilling your prescriptions based on your ability to pay for them.

Medicare Advantage covers prescription drugs in a similar way that private insurance plans do, in which these plans negotiate drug prices with pharmaceutical companies and develop a list of allowed prescription drugs along with a price schedule. When you are browsing prospective Medicare Advantage plans, you'll need to make sure that the plan covers the prescription drugs you are taking so that you do not have to pay full price for your medication. In most cases, even if your prescription medications are not covered, it will be possible to switch to similar medications with the same effect that are covered by the Medicare Advantage plan.

Overall, Medicare Advantage reduces your out-of-pocket costs in exchange for very small premiums; in some cases, Medicare Advantage plans offer you additional medical services, such as hearing, dental and vision coverage, which are not covered by traditional Medicare. In exchange, you'll have to be more mindful of which providers are in-network and which prescription drugs are covered. Medicare Advantage plans also can change annually; unlike traditional Medicare, it may be possible for insurance to stop covering your doctor. However, this is no different from traditional private insurance that you would receive from any employer; as long as you understand its limitations and keep abreast of any changes, Medicare Advantage plans are an excellent way to save money on medical costs. For more information, visit a site such as