Part 2: Factors that Lead to the Creation of Medicare Advantage Plans

In the first part, we discussed various issues associated with the original Medicare plan. In the second part, we’ll discuss how a Medicare Advantage Plan was introduced to solve these issues.


1) With the introduction of Medicare Advantage Plan, go to

the government was able to reserve a fixed amount for paying the insurance agencies each month so that the company could pay for the medical expenses on behalf of the beneficiary. With this, the government was able to place a fixed amount within the national budget. Meaning all the medical expenditure was the responsibility of private insurance carriers.


2) The beneficiary was offered a substantially lower premium with this coverage as compared to what they might have paid in case of a supplement plan since the beneficiary agreed to utilize the provider’s network as well as share in certain copays for services, for instance, $5 for visit to the healthcare provider. Thus, the beneficiary now was able to benefit from another plan if he/she couldn’t pay for a supplement plan.


In short, the beneficiary received a health coverage at a reduced premium, while the government was able to add a specific number within their annual budget.


When selecting between a Medicare Advantage & a Medicare Supplement plan, it is crucial to consider how both the plans vary. Supplements compensate secondary to basic Medicare without using any network. Many times, you’ve no copays since you paid a higher amount as a premium for your supplemental plan up front. On the opposite side, Medicare Advantage plans normally have inexpensive monthly premiums. But, they do have their individual guidelines about what insurance carriers you pursue your care from. Plus, you’ll have copays for different services like lab-work, visits to a doctor, surgeries, etc.


Every state offers the Advantage Plan from a variety of insurance providers. Also, some counties may offer more options to the consumer as compared to others because of the population. Every plan comes with its own copays, benefits, formularies, & networks. Thus, it might take some research from you to sort each of them out.


How could you ensure your chosen plan is best suitable for you?


The simplest way is to contact an experienced and independent insurance representative in this field. You may also search the web or ask your friend for his/her referral to locate the right person for your job.