Medicare Advantage Plans: Advantages & Disadvantages – Medicare Advantage plans are an excellent way to save money on your medical expenses. They provide services and prescriptions you would typically not have access to without a Medicare plan, such as hospice care. However, Medicare Advantage plans
also have certain disadvantages compared to traditional Medicare.
Understanding How Medicare Advantage Works
Medicare is generally available for people age 65 or older, younger people with disabilities, and people with end-stage renal disease—permanent kidney failure requiring dialysis or transplant—or amyotrophic lateral sclerosi (ALS).
Medicare Advantage plans are Medicare-approved policies offered by private companies as an alternative to traditional Medicare coverage. MA plans provide hospital and outpatient coverage that replaces that under parts A and B of Medicare, with the exception of hospice care. Most MA plans also include Part D prescription drug coverage.
Medicare Advantage plan providers receive a fixed fee from the program for each enrolled health plan participant. The plan providers also collect out-of-pocket costs from policyholders, and may limit coverage to providers in a network while requiring referrals to see specialists.
Some Medicare Advantage plans cover additional costs not covered by traditional Medicare, including vision, dental, and hearing-related expenses. Medicare Advantage plans don’t work with Medigap, which is also called Medicare Supplement Insurance.
The average Medicare Advantage monthly premium in 2025 is $17.00 ($18.23 in 2024.6 Medicare Advantage participants pay any MA plan premium in addition to the monthly Medicare Part B premium, which is set at $185.00 in 2025 ($174.70 in 2024).
Here are some of the advantages and disadvantages of these health insurance plans.
Advantages:
1. A Medicare Advantage Plan may provide coverage for benefits that Original Medicare does not, such as some vision, hearing, and dental services, as well as fitness programs (gym memberships or discounts) (like routine checkups or cleanings). Plans have the option of including additional benefits.
2. Benefits are provided through a network of providers (HMO, PPO, or EPO). They are not required to cover every service. This means that certain services maybe not be covered by the plan you enrol in. For example, some Medicare Advantage plans do not cover outpatient care (Medicare Advantage Plans are generally HMOs, which must contract with an IPAB for hospital coverage for inpatient expenses).
3. The other major advantage of Medicare Advantage plans is financial protection, meaning that if you use your health insurance plan to get medical treatment and then get seriously ill or develop a chronic condition as a result of the treatment you had, your policy will pay for the costs of that care. In contrast, when you have Original Medicare, you may be liable for the cost of care billed to Medicare but not paid by Medicare.
4. Medicare Advantage Plans are offered through private companies. If you go out-of-network, you may have to pay more of the cost of receiving care. In addition, sometimes, your in-network doctors will be out of your plan’s network, and you’ll have to pay higher co-payments or even full rates for medical services.
5. Some of the best Medicare Advantage plan are run by health insurance companies that are also operating a Social Security Supplement Insurance Plan that provides extra benefits like dental and vision care and saves you money on out-of-pocket medical costs. Also important: some health insurance companies have been around for decades, offering a good track record.
Disadvantages
1. The restrictive provider networks of Medicare Advantage plans, which restrict your ability to choose which doctor or hospital to utilize, are their major drawback. Budgeting for medical expense is made more challenging by the fact that Medicare Advantage prices are mostly determined by how much medical treatment you use.
2. Medicare Advantage plans may have a larger deductible than you’d get on Original Medicare.
3. Medicare Advantage plans are not an option for all senior citizens, just those eligible for the Special Needs Trust (SNF) program and seniors with end-stage renal disease or who require dialysis treatment.
4. These plans may not be suitable if you need to see a specialist or if you have chronic conditions such as HIV/AIDS, chronic obstructive pulmonary disease (COPD), diabetes, or multiple sclerosis that affects your mobility, mental functioning, or ability to work.
5. More information is needed to establish which type of health insurance plan is best for individuals and families.
Rules for Medicare Advantage Plans
The organizations that provide Medicare Advantage Plans get set monthly payments from Medicare for your treatment. These businesses are subject to Medicare’s requirements.
Various out-of-pocket expenses may apply to different Medicare Advantage Plans. Different regulations may apply to how you get services, such as:
If you want a recommendation to see a specialist
If you must seek non-emergency or non-urgent care from physicians, institutions, or vendors covered by the plan.
Who would benefit most from a Medicare Advantage plan?
Beneficiaries with good health who don’t frequently utilize medical services are the greatest candidates for Medicare Advantage plans. This kind of policyholder could benefit from a Medicare Use plan, paying little in the way of premiums and copays while taking advantage of benefits to maintain their health, such as gym memberships, which are provided as part of certain plans.
Who is Medicare Advantage bad for?
Chronically sick beneficiaries may require access to certain physicians, specialists, and medical facilities that may not be included in a plan’s network; thus, Medicare Advantage plans are likely not the best choice for them. In other words, a person who suffers from a chronic illness would presumably benefit more from having access to the wider selection of providers that Original Medicare and Medigap offer.
What’s the biggest disadvantage of Medicare Advantage?
The restrictive provider networks of Medicare Advantage plans, which restrict your ability to choose which doctor or hospital to utilize, are their major drawback. Budgeting for medical expenses is made more challenging because Medicare Advantage prices are mostly determined by how much medical treatment you use.
Medicare Advantage and employer health insurance:
A beneficiary may hold both Medicare and health insurance provided by their job. On the other hand, main and secondary coverage depends on the company’s size.
If your firm has fewer than 20 employees, Medicare, for instance, becomes the primary payer, which means Medicare is billed first and your employee health insurance plan second. Your employer’s plan is the major payer if your company has 20 or more employees, and Medicare Advantage is the secondary payer.
Beneficiaries with small group insurance should sign up for Medicare Parts A and B as their employer group plan could not cover them if they don’t.
The cost of Medicare Advantage plans will likely be less than that of employer-sponsored insurance. Additionally, Medicare Advantage includes annual out-of-pocket restrictions, whereas employer-sponsored plans might not.
An employer-sponsored plan, unlike Medicare Advantage, might not have rigid provider networks and might provide more generous medication formularies.
Frequently Asked Questions (FAQs)
What is Medicare Advantage?
Medicare Advantage, also known as Medicare Part C, is a category of privately run health plans contracted by Medicare to provide an alternative to traditional Medicare coverage for program participants. Medicare Advantage plans typically replace coverage under Medicare parts A, B, and D. They often offer lower premium costs and cover more services than traditional Medicare while limiting care to in-network providers and requiring referrals for consultations with specialists.
What Are the Disadvantages of Medicare Advantage?
Medicare Advantage can become expensive if you’re sick, due to co-pays. The enrollment period is limited, and you won’t be eligible for Medigap coverage if you have Medicare Advantage. Additionally, providers can leave and join your network at any time.
Can I Sign Up for Medicare Advantage with a Preexisting Condition?
Yes. Medicare Advantage offers coverage for individuals with preexisting conditions.
Conclusion
Beneficiaries with good health who don’t frequently utilize medical services are the greatest candidates for Medicare Advantage plans. This policyholder could benefit from a Medicare Use plan, paying little in the way of premiums and copays while taking advantage of benefits to maintain their health. Such as gym memberships, which are provided as part of certain plans.
