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Carla Fried: Medicare Advantage is cheaper for a reason -- beware

Carla Fried, on

Published in Home and Consumer News

The smart way to shop for any type of insurance is to steel yourself and imagine the worst. The house burns down. The car is totaled. With those “what-ifs” front and center, you’re more inclined to seek out coverage that provides the best protection.

The big what-if of Medicare Advantage

If you are lucky enough to be healthy when you’re ready to enroll in Medicare — for most folks it’s at age 65 — the vital “what-if” you should consider: what plan you want if you are diagnosed with cancer or another serious illness that requires lengthy and costly medical care.

If you are willing to ponder that possibility, you will find that the Medicare option that looks so enticing when you’re healthy (likely with no extra premium and expanded coverage) becomes costly when you actually need to use it.

Two types of Medicare

Original Medicare allows you to see any doctor and use any facility in the U.S. that accepts Medicare. Most do. But to get blanket protection with Original Medicare, it’s vital to also purchase a supplemental policy — referred to as Medigap — that picks up the portion of certain bills that Medicare doesn’t pay directly.


A Medigap policy that provides complete coverage (Medigap Plan G for those of you in shopping mode) might have a monthly premium of $100 to $300 or so, depending on where you live. That’s not nothing. But again, other than a basic deductible for Medicare Part B ($203 in 2021), you’re likely to have everything covered.

Medicare Advantage is the other way you can enroll in Medicare. Most Advantage plans work like a health maintenance organization. You are limited to a network of doctors and facilities based on where you live. You also typically need pre-authorization for any medical care beyond basic preventative care.

The allure of Medicare Advantage is that you don’t need to purchase any supplemental coverage. In fact, you’re not allowed to have a Medigap policy. Not spending $100 to $300 a month on Original Medicare + Medigap is undeniably attractive. At least when you are healthy.

But you buy insurance to protect you from the big what-if. And that’s where Medicare Advantage could disappoint. Remember, you can’t see every doctor who accepts Medicare. That means the specialist you really want to oversee your care may be out of reach.


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