Medicare Advantage Plans Can Cut Costs and Hassle

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Here’s something to consider when Medicare’s open enrollment period starts October 15: a private Medicare Advantage plan. Enrollment hit a record high this year, with 14.4 million individuals, or about 28% of all Medicare beneficiaries, in these private insurance plans—a 30% jump in the past three years, according to the Kaiser Family Foundation.

Advantage plans can reduce the costs and the hassle for patients who now need to buy three policies for comparable coverage—traditional Medicare, a prescription-drug plan and a supplemental policy that covers out-of-pocket costs. “There is a convenience factor with Medicare Advantage plans, and they can be cheaper” than fee-for-service Medicare, says Joe Baker, executive director of the Medicare Rights Center.

But if you’re enrolling in Medicare for the first time, or considering a switch from traditional Medicare, you need to choose carefully. Insurance plans that advertise zero premiums could end up charging large co-payments. And the plans, often HMOs, will likely limit your choice of doctors and hospitals. Even if you’re already enrolled in an Advantage plan, check if it’s making big changes for next year.

Also, review the plans’ quality ratings. The new health care law’s $716 billion in Medicare savings over ten years will come partly from Advantage plans, which now cost the government more on average per beneficiary than traditional Medicare.

Lowering costs was the biggest consideration for Jesse Hernandez, a retired railroad worker who had a pituitary tumor, hydrocephalus and several other conditions, says his wife, Rosa. He died this year at 69.

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