by National Council on Aging (NCO)
What is the benefit of having a Medicare Advantage plan?
There are five key advantages to choosing a Medicare Advantage plan compared to original Medicare only:
1. Lower costs. With both types of plans, you must pay the monthly Part B premium ($202.90 in 2026, projected to increase to $209.50 in 2027 according to the 2026 Medicare Trustees Report). But Medicare Advantage premiums are often less expensive (sometimes $0) compared to original Medicare combined with a Medigap policy. In 2026, the estimated average monthly Medicare Advantage premium is $14.00—this is projected to drop to $12.00 in 2027.
What’s more, Medicare Advantage plans have a maximum out-of-pocket spending limit for each policy period. In 2026, this cap is $9,250 for approved services (but some plans set lower limits); in 2027, this cap will increase to $9,850. Once the cap is reached, no additional payments are required for covered services for the rest of the year. Original Medicare does not offer an out-of-pocket maximum, so your expenses could be much higher.
2. Similar to employer health insurance. If you’re leaving a job where health insurance was offered in the form of an HMO plan, a Medicare Advantage plan will look similar. Deductibles, co-insurance, drug coverage and physician networks are all part of the package.
3. One plan instead of several. A Medicare Advantage plan is an “all in one” system. Often, you have only one insurance card to keep track of, not three. Some people prefer to deal with one plan versus the separate plans of original Medicare, Part D, and Medigap.
4. More coordinated care. HMO Medicare Advantage plans require you to have a primary care physician (PCP). They are the “gatekeeper” for all your care, responsible for making sure your team collaborates with other medical professionals on your treatment. For people with complicated health conditions, this kind of coordinated effort can be valuable.
5. Additional benefits (not covered by original Medicare). Medicare Advantage plans often include prescription drug coverage, plus vision, hearing, and dental benefits—all of which are not part of original Medicare. In some cases, an additional premium may be required, but that is not true for all plans. Most Medicare Advantage plans also offer non-medical benefits as well, such as nutrition counseling, meal and grocery delivery, transportation access, and falls prevention aids. But it’s worth noting that due to a variety of factors, many plans are scaling back or eliminating these extra benefits for the 2027 coverage year.
What are the disadvantages of a Medicare Advantage plan?
There are four key disadvantages of choosing a Medicare Advantage plan versus original Medicare:
1. Getting coverage for procedures can be more complicated. Since managed care plans aim to keep health care costs within budget, they try to prevent overuse through various means—such as “prior authorization” requirements for surgery, home health care, hospital stays and medical equipment. Doctors often must provide additional proof of necessity for a service before the plan will pay.
2. Billing before you receive treatment. With Medicare Advantage, copayments are paid prior to treatment. For multiple physician visits, there may be several copayments required upfront before you can see a doctor or receive care. In contrast, if you have original Medicare plus Medigap, you would owe a 20% coinsurance (billed after the service) that would be covered by your Medigap policy.
3. Less freedom in choosing health care providers. With original Medicare, you can see any physician who accepts Medicare, which gives you access to providers and major medical centers nationwide. In contrast, Medicare Advantage plans are more restrictive in terms of provider networks. A network is a list of doctors, hospitals, and/or pharmacies that negotiate prices with insurance companies. In some areas, it can be difficult to find a local doctor or hospital that works with Medicare Advantage. And if you visit a doctor or a hospital that isn’t “in-network,” you will pay higher out-of-pocket costs.
4. Less compatible with other forms of retiree coverage. There are also some limitations in how Medicare Advantage works with other types of retiree coverage. For example, people with TRICARE for Life need to enroll in original Medicare (versus Medicare Advantage) in order to keep their TRICARE coverage. Prior to enrolling in a Medicare Advantage plan, be sure to find out how it will work with other retiree coverage you have.