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The Debate Of 2020: Traditional Medicare Vs. Medicare Advantage Plans

By Wes Holloway

It’s that time of year again…the time everyone looks forward to: Medicare enrollment! If choosing the right Medicare plan is as confusing to you as much as a certain election that just occurred, you’re not alone. Most Medicare enrollees struggle with deciding which plan will work best for them based on costs and coverage needs. The first decision that Medicare enrollees have to make is choosing traditional Medicare or a Medicare Advantage plan. Read on to learn more about each plan and some key differences between the two. It will be more educational and much less painful than a political ad, we promise.

Medicare Advantage Plans 

You’ve probably seen Joe Namath at one time or another advertising a Medicare Advantage Plan on television. Medicare Advantage Plans are offered by organizations approved to offer Medicare plans. Medicare Advantage Plans are a combination of Medicare Parts A & B. They can also include Part D coverage for prescriptions and dental and vision coverage as well. You may have heard them referred to as Part C or MA Plans. Common types of Medicare Advantage plans include: (1)

  • Health Maintenance Organization (HMO) Plans
  • Preferred Provider Organization (PPO) Plans
  • Private Fee-for-Service (PFFS) Plans
  • Special Needs Plans (SNPs) 

Traditional Medicare

Traditional Medicare encompasses Part A, B, and D. Part A covers hospital costs, Part B covers medical expenses, and Part D covers prescription drug costs. Part A is free, and Part B has monthly premiums based on your previous year’s income. Part D insurance came into existence relatively recently during the George W. Bush administration, and you generally have to purchase Part D separately through a private drug program. To make sure you take care of Medicare deductibles and caps, Traditional Medicare Plans are typically combined with supplemental insurance. 

Differences Between Medicare Advantage & Traditional Medicare

Both plans can meet your healthcare needs, but there are some critical differences between the two. One benefit to Medicare Advantage Plans is that they are often cheaper than traditional Medicare, and sometimes even free. However, traditional Medicare also has much more flexibility in terms of the healthcare providers you can see. Medicare Advantage Plans utilize a network of approved healthcare providers, which limits where you can receive care. Make sure you understand the network and any restrictions before signing up for a Medicare Advantage Plan. Where you live can have an impact on the types of networks available to you. For example, for someone living in a large metropolitan area with an extensive healthcare provider network, a Medicare Advantage Plan may work best for them versus someone living in a more rural area. Once you are on a Medicare Advantage Plan, it can be tough to move back to traditional Medicare as well.

Which One Should You Choose?

Your healthcare costs and how you receive your care will be impacted based on whichever Medicare plan you choose. It is best to consider your lifestyle, medical needs, and preferences when deciding. Talk to a qualified financial professional who can help you factor in all of those variables, along with your entire financial picture, to help you determine what plan works best for you. We at Heritage Retirement Advisors can help you accomplish this through teamwork, transparency, and trust. Give us a call at 817.503.0100 or email to schedule a free introductory meeting.

About Wes

Wes Holloway is a senior financial advisor for Heritage Retirement Advisors. Wes is passionate about helping people plan for, transition to, and live in retirement with success and fulfillment. Wes graduated from Texas A&M with a degree in industrial engineering and earned his MBA from the University of Texas at Arlington. Before joining Heritage, Wes worked in the travel and transportation industry both for a major airline and an Travel and Transportation Technology provider. To learn more about Wes, connect with him on LinkedIn.