I’m 60 and not yet investigating, so here’s my Q: does MedAd ‘require’ MediGap insurance the way trad Medicare does? That would be another layer of complication.
One of the big advantages Medicare Advantage has over traditional Medicare is that it does provide a catastrophic cap on financial exposure.
Traditional fee for service Medicare Part has no out of pocket limit. Beneficiaries can buy that protection with a MediGap supplemental policy. There are roughly a dozen standardized supplemental designs at various premium points. Each plan design has a different coverage matrix for the deductible, co-pays and coinsurance as well as a maximum allowed out pocket limit.
Medicare Advantage plans may also wrap in Medicare Part D drug benefits into the same plan. There are some nifty incentive and substitution effects at the plan management level for health economists to geek out about but the primary point of interest is that a comprehensive Medicare Advantage plan reduces the number of decisions that need to be made and pieces of paper that need to be tracked. People who stay within traditional Medicare need to manage hospital and professional insurance with their own unique cost sharing (Part A and B), potentially buy a Medicare Part D drug plan and look into a MediGap supplement to get some catastrophic protection. People who buy A&B only Medicare Advantage can avoid thinking about supplements.
Medicare is complicated. It is a weird benefit design that was cutting edge Blue Cross/Blue Shield thinking from 1964 with several kludges added to it since then to solve real problems. Medicare Advantage plans have the potential and ability to be a bit less kludgy. And sometimes that non-kludginess is quite valuable to people in the right circumstances.