The 9 Biggest Reasons People Choose Medicare Advantage Plans

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More retirees are opting for Medicare Advantage plans over Original Medicare, and a recent survey indicates why. It’s about more than money.

About 33.8 million people, or half of all those enrolled in Medicare, will choose Medicare Advantage plans in 2024, the Centers for Medicare & Medicaid Services (CMS) estimates. That’s up from 31.6 million, or 48%, in 2023 and more than double the number 10 years earlier in 2014.

More than 10,000 people a day turn 65 and become eligible for Medicare. They can choose their coverage at that time, and those who are already enrolled can use the annual Medicare open enrollment period, Oct. 15 to Dec. 7, to review, swap, join or drop Medicare plans for the coming year.

You are eligible to get Medicare coverage two ways: directly from the government — aka Original Medicare — or by selecting from the many Medicare Advantage plans offered by private insurers. Medicare Advantage plans bundle Part A (hospitalization) and Part B (doctor visits, screenings, labs, outpatient care) coverage and usually include Part D prescription drug coverage. Most require you to use doctors in the plan’s network. Plan premiums and copays for doctor visits and services vary by plan.

The website Retirement Living surveyed 351 Medicare Advantage beneficiaries to determine the top reasons they chose their plans and if they are satisfied with them. Overall, 71% of respondents said they were satisfied with their Medicare Advantage plans.

Here are the top survey results about what drives Medicare Advantage choices, respondents’ satisfaction rates for each and other information you need to make your own decision about which way to go.

1. Affordable costs and out-of-pocket expenses

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Survey respondents who said:

• This factor influenced their decision to enroll in a Medicare Advantage plan: 70%
• They are satisfied with their plan based on this factor: 76%

Medicare Advantage plans, also known as Medicare Part C, cap and could lower your out-of-pocket costs compared with having Original Medicare and adding supplemental coverage. Their in-network requirements help keep costs down.

Medicare Advantage plan premiums vary but the monthly average of $17.86 in 2023 likely will rise just 64 cents to $18.50 in 2024, CMS says. About 7 in 10 Medicare Advantage beneficiaries with prescription drug coverage pay no premium other than the one for Medicare Part B, which for most people in 2023 is $164.90. Part B premiums for 2024 will be announced soon, but analysts expect about a $10 a month increase.

In 2023, average annual out-of-pocket limits for Medicare Advantage enrollees is $4,835 for in-network services and $8,659 for in-network and out-of-network services combined, says KFF, a health policy research organization.

It can be confusing, Retirement Living found. More than 1 in 4 survey respondents reported paying out-of-pocket expenses for services they had believed were covered. Nearly 1 in 4 also said they needed out-of-pocket cost clarifications, which most got from their plans’ websites or customer service departments.

2. Prescription drug coverage

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Survey respondents who said:

• This factor influenced their decision to enroll in a Medicare Advantage plan: 53%
• They are satisfied with their plan based on this factor: 73%

Since 2021, more Medicare enrollees get prescription drug coverage through Medicare Advantage plans than through stand-alone Part D prescription drug plans, CMS says.

Either way, you’ll find drug plan costs vary widely. Each Medicare drug plan — whether a stand-alone Part D policy along with Original Medicare or one included in a Medicare Advantage plan — must offer at least a standard level of coverage, Medicare says. However, the plans vary on pharmacy access, which drugs they cover (their formulary) and how much they charge for copays (tiers). They can also change prices during the year. All Medicare plans negotiate to get lower prices for the drugs on their drug lists, so sticking to those will generally save you money, Medicare says.

Average premiums, benefits, and plan choices for Medicare Advantage and the Medicare Part D prescription drug program will remain stable in 2024, CMS says.

3. Access and ability to choose providers (tie)

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Survey respondents who said:

• This factor influenced their decision to enroll in a Medicare Advantage plan: 42%
• They are satisfied with their plan based on this factor: 58%

While most Retirement Living survey respondents said they were satisfied with doctor and hospital choices, about 1 in 4 said having limited service providers was a disadvantage of their Medicare Advantage plan.

If your Medicare Advantage plan is through a health maintenance organization (HMO), you might need a primary care physician’s referral to see specialists. If your Medicare Advantage plan is through a preferred provider organization (PPO), you might not need a referral to a specialist as long as the doctor is within their network. Your copay for an office visit to a specialist likely will be higher than for your visit to a primary care doctor, which in some plans is free.

Original Medicare operates on a fee-for-service (FFS) basis: You pay a deductible and a share of the Medicare-approved amount, and you can go to any hospital or doctor, including a specialist, that accepts Medicare.

3. Comprehensive coverage options (tie)

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Survey respondents who said:

• This factor influenced their decision to enroll in a Medicare Advantage plan: 42%
• They are satisfied with their plan based on this factor: 47%

Medicare Advantage plans often offer more coverage than Original Medicare.

Original Medicare Part A covers inpatient hospital stays, care in a skilled nursing facility in certain circumstances, hospice care and some home health care. Part B covers doctors’ services, outpatient care, medical supplies and preventive services.

Most Medicare Advantage plans include all this plus prescription drug coverage. They may also offer coverage or discounts for gym memberships, vision, hearing, dental services, over-the-counter medicine and transportation to doctor visits, CMS says.

A study by The Commonwealth Fund, an organization focused on health care equity issues, found that Medicare Advantage plans make it somewhat easier for enrollees to get help managing their health compared with Original Medicare. Medicare Advantage enrollees are more likely to have a treatment plan, someone who reviews their prescriptions and a regular doctor or place of care.

5. Convenient network providers and referrals

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Survey respondents who said:

• This factor influenced their decision to enroll in a Medicare Advantage plan: 36%
• They are satisfied with their plan based on this factor: 49%

The CMS requires Medicare Advantage plans to contract with enough doctors and facilities to ensure most enrollees in a county can access network care within reasonable travel time and distance limits, which vary by area.

Physician requirements could include primary care doctors as well as cardiologists, oncologists, dermatologists and more than a dozen other specialists. Facilities can include hospital beds, cardiac surgery, mammography, physical therapy and other services.

“Given the high volume of change that occurs in the healthcare landscape throughout a given year, the providers/facilities available to achieve appropriate network access is in a constant state of flux,” CMS says.

Other reasons people choose Medicare Advantage

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Here are other top-ranked factors that survey respondents said influenced their enrollment decisions and how many said they were satisfied based on that factor:

Medical and preventive care options

  • Influenced decision: 34%
  • Satisfied: 61%

Customer service support and reputation

  • Influenced decision: 22%
  • Satisfied: 40%

Wellness programs

  • Influenced decision: 19%
  • Satisfied: 35%

Personalized plan structures and additional benefits

  • Influenced decision making: 14%
  • Satisfied: 19%

Consider cost, coverage, provider choice and out-of-pocket expenses when choosing the plan right for you, whether that be one of many Medicare Advantage plans or Original Medicare

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