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How To Choose A Medicare Advantage Plan


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When making a choice about which Medicare Advantage plan is best for you, consider breaking the process down in to the following 5 steps. As you go through the steps, keep in mind that ALL Medicare Advantage policies must offer at least the same coverage provided by Original, Fee-for-service, Medicare. (if you are comparing health insurance policies that do not involve Medicare, click here.)

At the least, look for plans that include your key doctors and preferred hospital in the network,, and compare the out-of-pocket costs for your usual and anticipated medical care and prescription drugs. In addition to looking at your previous bills, you can get cost estimates at offsite linkand click on "Medicare health plans." 

Step 1. Understand the basic terms used in health insurance. The following are key:

  • Co-insurance:  To help encourage insureds to only use medical care when necessary, many health insurance policies do not pay 100% of each claim. Instead, insurers generally only pay a percentage of the bill such as 75 to 80% of the covered charges. This leaves you, the insured, to pay the rest. The percentage that insured pays is known as "co-insurance." For examples, click here. 
  • Co-pay: A co-pay is the amount you, the patient, have to pay for each visit to a health care provider. Co-pays are usually low dollar amounts, such as $10 or $25. For a person with a life changing condition, co-pays can add up very quickly.
  • Deductible: A deductible is the amount that you pay each year before the insurance company pays anything.  Until the deductible is met, you will not receive any reimbursement for your claims. A deductible is generally payable on an annual, calendar year basis. Deductibles can range from $250 or less to $5,000 or more. (For an example and how to minimize payments, click here
  • Formulary: A Formulary is a list of medications an insurer will pay for. In order to encourage insureds to purchase less expensive drugs, formularies are often divided into sections with differing tiers. Each tier has have a different co-pay you have to pay. For instance, a formulary could have three tiers: Tier 1: New branded drugs which have a high co-pay, Tier 2: Branded drugs which have a less expensive co-pay, Tier 3: Generic older drugs which have the lowest co-pay. Since no insurance policy is set in stone, exceptions can be made. 
  • Types of health insurance policies:
    • HMO: The insurer manages care, usually requiring permission before seeing a doctor, or taking at test or treatment.  Treatment may be limited to a plan’s doctors, hospitals and other facilities, or ones it contracts with (“in network”). Insurer may pay part of use of medical care outside its network.
    • Original Fee-for-Service (“Indemnity”): you have unrestricted choice of doctors, tests and treatments (always subject to the requirement of "medical necessity.")
    • Original Fee-for-Service Medicare: Traditional Medicare which includes unlimited choice about doctors, tests and treatments (always subject to the requirement of "medical necessity.")
    • POS (Point of Service): A POS plan can be thought of as an HMO which allows insureds to receive services outside of the network.
    • PPO (Preferred Provider Organization): You pay less to see doctors etc in an insurer’s network. No need for prior approval.

Step 2. Think about your needs and desiresincluding what is important to you and your family. For instance:

  • Out-of-pocket costs including everything you are likely to have to pay during the year, such as:
    • Premiums
    • Deductible
    • Co-pays for doctor visits you can anticipate either based on your history or what you can reasonably anticipate will be the case in the coming year
    • Co-insurance for treatments, tests and/or hospital stays that are likely to occur
    • Your share of drugs on the company's formulary, as well as the cost of drugs which are not on the formulay
    • Preventive tests
    • Costs for seeing out-of-network doctors
    • Nursing care
    • Long term care
  • With respect to doctors:
    • Are you willing to change doctors if your current doctor doesn’t work with the new insurer?
    • Do you need unlimited choice or are you willing to be limited to the doctors a particular insurer works with?
  • Are you okay with having to get prior approval to see a doctor, or get a test or treatment?
  • Do you need dependent coverage?

Keep in mind that Advantage networks are regional.  If you expect to spend part of the year away from your home, you will not be covered if you will be out of the region. Traditional Medicare may be better for you than a Medicare Advantage plan..

Step 3. Compare coverages available in the different policies and how well they satisfy your priorities.  `For example, some plans add vision and dental benefits. Most plans cover prescreiptions. Some plans add an annual cap on out-of-pocket expenses.The Medicare Personal Plan Finder helps compare advantage options in your community. Go to  offsite link

If you need help, help is available through the State Health Insurance Program. To locate a representative, go to  offsite linkor call 800.633.4227 for contact information. 

Also take a look at our Health Plan Evaluator. By weighting various factors according to your priorities, it may help make a decision.  As you'll see, you do not have to complete the entire chart. Only complete the sections that are importance to you.

NOTE: Before accepting what you read on a site as reality, call the insurer to confirm details. If you don't know what questions to ask, a counselor from your State Health Insurance Assistance Program can help you figure out the right questions. To find a counselor, go to offsite link

Step 4. Compare costs

Do not just look at premiums. Also look at the costs you have to pay out of pocket. For example, the amount of the deductible, co-insurance payments and what you have to pay for prescription drugs. 

A few potentially expensive details that are frequently overlooked relate to prescription drugs. Is the pharmacy you use on the "preferred" list? Are your drugs on the formulary?  Do you have to try a less expensive alternative before paying for your current prescription? Are there limits on the quantity of a prescription you can get?

Step 5. If the plan you are interested in limits you to doctors in their network, check to see whether your specialists and regular doctor are in network.

Step 6. Check the insurer's reputation. The policy that looks the best on paper may not be worth a lot if the company doesn’t have the money to pay claims, has a reputation for stonewalling when it comes to claims or isn't responsive to individual needs.

  • Check with your doctors' offices. What is their opinion of each company?
  • To learn about a particular insurer’s financial stability, check:  A.M. Best’s Financial Strength Ratings 
  • Look at the rankings published by National Committee for Quality Assurance (NCQA) available by state through Consumers Report. Click here. offsite link
  • Ask a health insurance broker; people at work; your local disease specific nonprofit organization and people in your support group if you are a member of one. In particular, ask about how the company(s) in which you are interested treat people with your health history.

Step 7. If a plan has a disease management program, check it out. Call the insurer and ask:

  • How many people with your disease are in this particular type of insurance? How many are in the disease management program? (The more people, the more likely the company will understand and cover your needs.)
  • What specific services does the program offer?
  • How do the outcomes for people in the program compare to people with the same disease who are not in the program? Compared to people not in the company's plan?


  • For information about comparing a Medicare Advantage policy to original Medicare, click here.
  • Keep in mind that you can switch to another Medicare Advantage plan or to Original Fee-For-Service Medicare for any reason, including but not limited to, if yours raises premiums, your doctor leaves the plan, or the plan drops your drugs from its formulary. You can make the switch during the period between October 15 and December 7. New coverage takes effect January 1 of the following year. A new plan cannot reject you because of your health.  

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