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Weighing the Pros and Cons of Medicare Advantage Plans

Weighing the Pros and Cons of Medicare Advantage PlansPhoto from Unsplash

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Are Joe Namath and William Shatner giving you the best possible advice about Medicare?

During the Medicare Open Enrollment period last fall, you probably saw TV ads for companies selling Medicare Advantage Plans featuring these and other senior celebrities. That’s because, under most circumstances, the Open Enrollment period is the one time per year that seniors can change their Medicare coverage. And, in recent years, Medicare Advantage Plans have become a popular way for seniors to cover more of their health care needs.

However, rising costs are causing many insurance companies to change, and in some cases, stop offering Advantage Plans. On today’s show, we discuss how potential changes could affect the healthcare piece of your comprehensive financial plan.


Remember your A, B, C, and D’s.

First, let’s do a quick review of Medicare:

Part A is your inpatient hospital coverage. You have been paying into Medicare Part A via the payroll tax for as long as you’ve been working, so there is no premium for Part A as long as you have paid in for 40 quarters (10 years). You can enroll in Medicare Part A when you turn 65 years old and take advantage of some additional free “Welcome to Medicare” benefits.

Part B covers 80% of outpatient medical care, including doctor’s visits. In 2024, the monthly Part B premium is $174.70, with a deductible of $240. Technically, Part B is optional, but most seniors should plan to pay for this coverage. Many seniors also purchase supplemental Medigap plans that cover the 20% of costs that Part B doesn’t.

Part C is Medicare Advantage, which is insurance you buy from a private company that covers Parts A and B. Most plans also cover Part D, prescription drugs. Some Advantage Plans also include extra benefits like vision, dental, and gym memberships. Medicare Advantage premiums often cost less than Part B premiums, sometimes as little as $0.

Part D is another optional plan that covers prescription drugs. In 2024, the average cost for a Part D Plan is $55.50.

A real “Advantage”?

The government subsidizes Medicare Advantage Plans as an alternative for seniors who want an all-inclusive healthcare solution from a private provider. By law, Advantage Plans must cover everything Parts A and B cover. Most of these plans also cover the 20% gap in Part B coverage.

Seniors using traditional Medicare can go to any doctor that accepts Medicare and receive the same coverage. Medicare Advantage customers are usually connected to a network, like an HMO (Health Maintenance Organization) or PPO (Preferred Provider Organization). So, if you go to a doctor who accepts Medicare but is not in your network, you’ll probably have to pay something out of pocket. That can limit the appeal of Advantage plans to seniors who plan on traveling a lot during retirement or who want some flexibility around which doctors they see.

As individuals approach Medicare eligibility, carefully weighing the costs and benefits of various coverage options, including Medicare Advantage plans, is important. While Advantage Plans often offer lower premiums compared to traditional Medicare, beneficiaries should also consider potential out-of-pocket expenses for healthcare services. Many people with Advantage Plans report satisfaction with their coverage, and these plans continue to be a popular choice among Medicare beneficiaries. However, as with any insurance product, coverage denials or miscommunications have been reported. Despite high satisfaction ratings among Medicare Advantage beneficiaries, some health systems are considering dropping certain plans due to authorization requirements and high denial rates. However, healthcare leaders caution that abandoning the program may have unintended consequences and suggest collaborating to address issues and improve the system for all stakeholders.

Change is nothing new.

As Medicare Advantage Plans continue to evolve, it’s important to recognize that many people rely on these plans for their healthcare needs. While some insurers may consider scaling back their offerings, the high demand for Medicare Advantage Plans among beneficiaries suggests that such changes won’t be taken lightly. If some plans are reduced, the increased demand for the remaining plans could potentially influence premiums. However, the impact on coverage quality remains to be determined and would depend on various factors, such as the specific adjustments made by insurers and the regulatory environment. As policymakers and insurers navigate these challenges, they must prioritize the needs of the millions of Americans who have come to depend on Medicare Advantage Plans for accessible, affordable, and comprehensive healthcare coverage.

Is it possible that the government will step in and change its requirements for Medicare Advantage providers? Higher earners already pay an income-related monthly adjustment amount (IRMAA) on top of their Part B and D premiums, so it wouldn’t be shocking to see a similar sliding scale on some Advantage or Medigap plans in the future.

In other words, if changes are indeed coming to Medicare, that’s nothing new. IRMAA, Part B premiums, the plans offered, and prescription drug coverage already change from year to year. Most importantly, your health care needs will be met in retirement.

As part of our comprehensive financial planning process at Keen Wealth, we believe it’s crucial to help our clients understand how Medicare works within the context of their overall retirement strategy. Instead of entrusting Broadway Joe or Captain Kirk with your health care, visit our offices and have a conversation with our knowledgeable advisors. Together, we can review your current coverage, discuss your options, and make informed decisions that optimize your Medicare benefits as part of a well-rounded retirement spending plan. Our checklist-driven approach ensures that we cover all the essential aspects of your financial well-being, including healthcare costs, to help you navigate retirement with confidence and peace of mind.


About Bill

Bill Keen is a financial advisor with over 30 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he focuses on providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to Forbes, U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit

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