How Safe Is Your Medicare Advantage Plan?
Medicare Advantage plans have become increasingly popular over the years as older Americans look for ways to cut back on their out-of-pocket healthcare costs. By combining the coverage of traditional Medicare, a Medicare prescription drug plan, and a Medicare supplemental insurance policy into one package, Medicare Advantage plans have the advantage of simplicity and can also bring cost savings. Yet it's also important to understand the potential risks of Medicare Advantage plans so you can evaluate whether it makes sense to choose one over traditional Medicare.
The way that Medicare Advantage plans are able to offer customized coverage at lower rates than you'd pay for similar coverage options elsewhere is by using the same tactics that private insurance companies use with health insurance coverage for working-age people. Traditional Medicare offers coverage for any medical professional who accepts Medicare, but many Medicare Advantage plans establish more limited networks of medical professionals. If you stray outside of your network, you could be responsible for a greater proportion of your healthcare costs -- or even get left with no coverage at all.
Different people will put different values on having a full range of choices of their healthcare professionals. In general, those who are relatively healthy are better able to navigate less inclusive provider networks because they don't have the complex medical histories that make familiarity more valuable. By contrast, if you have a chronic condition or have suffered major health issues during your lifetime, the work involved in bringing a new in-network professional up to speed could make any financial savings from using a Medicare Advantage plan not worth the extra effort.
Source: Fool.com
