Welcome to the continuation of Part 4 of the “New to Medicare Series” designed to educate those who will be going on Medicare soon. I want to remind readers that this series and all columns are not meant as a substitution for a one-on-one consultation with me or one of our licensed agents, nor are they written to sway your decision in enrolling in an Advantage Plan versus a Supplement or as an endorsement of any particular Advantage Plan or company.

What are the pros and cons of both Medicare Supplements and Advantage Plans?

This week will be dedicated to Advantage Plans as last week we focused on Supplements. I highly recommend reading them back-to-back for a better comparison experience. You can find prior columns on our Facebook group, Ask the Medicare Specialist, or check out the full series here.

Medicare Advantage, also known as Part C, is a health care choice Medicare recipients have that allows a federally approved private insurance company to administer benefits and pay claims in place of Original Medicare. Those who choose an Advantage Plan no longer have Medicare as their primary insurance and Medicare stops paying all but $1,676 of a Part A hospital stay or 80% of covered Part B services. What Medicare does instead is subsidize the insurance company one chooses approximately $12,000 per year to take on the burden of providing a benefit package and cover the cost of all claims, minus the insured’s costs in the form of co-pays, coinsurance, and possibly a deductible. In other words, and for a lack of an easier way to explain it, Medicare is basically paying to get rid of you. Those who go with an Advantage Plan need not carry or present their red, white and blue Medicare card at a doctor, hospital, or lab. It can literally be filed away with other important documents.

As of today, more Medicare beneficiaries are on Advantage Plans than Supplements. The number one and two reasons, in no particular order, for their popularity are the premium savings versus Supplements along with the inclusion of what are known as ancillary benefits, “extras,” that neither Original Medicare nor Supplements offer. Those on Advantage Plans who stay just relatively healthy can save $1,000 to $3,000 per year in premiums. Although Medicare regulations state that I can no longer list exactly what ancillary benefits are provided, I can tell you they can be quite generous and valuable. The real dollar of goods and services offered in some plans can be well over $2,000 a year.

Prescription coverage is included with most Advantage Plans, and some have small or no deductibles on Tiers 3, 4, and 5 drugs.

There is also no underwriting which means companies must accept anyone, regardless of current or previous health issues who has both Medicare Parts A and B. This allows people to shop and enroll in the plan they feel offers the best overall value each and every year from October 15th to December 7th during what is known as the Medicare Annual Enrollment Period (AEP).

There are some negatives, however. Those on Advantage Plans are exposed to medical bills up to their annual Maximum Out of Pocket (MOOP) which can be thousands of dollars in the event someone was to need chemo or other infusion therapy, radiation, injection therapy, a lengthy Skilled Nursing Stay, expensive durable medical equipment, and on some plans, hospitalizations. Those on Supplements G or N would pay nothing for those services in comparison. The average MOOP on the most popular Western Pennsylvania Advantage Plans in 2025 ranges from $5,000 to $6,000.

HMOs or PPOS and utilize networks of doctors and hospitals. For those on HMOs, claims will not be paid to out-of-network providers except in emergencies. PPOs allow people to possibly use services out of network, but care is not guaranteed, with the exception of an emergency, and the costs to use out of network providers can be much more expensive than those received in network depending on what plan and company one has.

The biggest negative of Advantage Plans, in my opinion, is that services such as MRI’s, CT scans, outpatient surgeries, and others need prior authorizations which can cause delays in receiving care or even denials. At times, the insurance company can also force people to get physical therapy before approving an MRI or CT scan.

In addition, benefits as well as premiums can change from year to year. Although the last four to five years have seen the best overall combination of premium savings versus Supplements, lower co-pays, reasonable MOOP, and more valuable ancillary benefits than ever before in my 18 plus years in the Medicare insurance industry, we’ve already seen some changes in 2025 that are leading to higher out of pocket costs. I’m anticipating other changes in 2026 and beyond due to new Medicare regulations, lower reimbursement rates to insurance companies, and part of the Inflation Reduction Act that has put a larger burden of paying more claims for prescription drugs on the insurers.

Which brings us to the last negative and one that quite often isn’t explained to people signing up for an Advantage Plan for the first time. Those who enroll in an HMO or PPO and have or develop any number of serious medical conditions may have to wait years or never be able to enroll in a Supplement again because those companies can discriminate on who they accept into their plans based on an applicant’s currently and previous health issues. If significant changes are made to Advantage plans over the next couple of years, there are going to be hundreds of thousands, if not millions of Medicare beneficiaries who will want to leave their HMO or PPO for a Supplement but won’t be able to get approved.

I want to reiterate again how important the choice one makes when going on Medicare Part A and/or B for the first time is. Failure to fully understand Original Medicare, Supplements, Advantage Plans and the impact of this initial decision can have consequences that last a lifetime. What we do at The Health Insurance Store is take the time to explain it all, listen to potential clients’ needs and concerns, answer questions, provide all available options side by side, and then help people choose the best plan or plans based on our discussions. As brokers, we are able to offer plans from every competitive Advantage Plan and Supplement on the market, ensuring an unbiased approach.

Consultations are always no cost. Call us to schedule or if you have any questions regarding this edition of the series or any other Medicare related topic. Feel free to email me personally as well. Aaron@GetYourBestPlan.com.