Understanding Advantage Plans and Supplements

Question from Heather: My husband and I are turning 65 soon and leaning towards choosing an Advantage Plan. However, there are so many choices, we're finding it a bit overwhelming. What is it that we should look for when making our final decision?

Answer: Medicare Advantage is an essential program for seniors and enrolling in an HMO or PPO can be a great choice for many. My first bit of advice for everyone going on Medicare Part B for the first time is to make sure you understand how both Advantage Plans and Supplements work and differ, as well as the rewards and risks of both. This includes the possibility that you may never be able to enroll in a Supplement the rest of your life after choosing an Advantage Plan. As long you understand this and some other important facts, Advantage Plans, over the next 5 to 10 years, can offer $5,000 to $10,000, possibly even more, in potential value when adding up premium savings and the real dollars in goods and services ancillary benefits, such as comprehensive dental coverage, can provide.

I understand how difficult choosing an Advantage Plan can be. Here in Western Pennsylvania, where we have our home offices, there are now 11 companies marketing HMOs and PPOs with upwards of 100 total available plans!

When we have clients who decide they prefer an Advantage Plan, we only recommend those that meet most or all the following criteria:

Low monthly premiums: The average premium for the most popular plans among our clients is $25. Paying a higher premium does not at all guarantee lower co-pays or out of pocket costs! In fact, the opposite is often true!

A large network of hospitals and health systems as possible: Even if you've become accustomed to seeing doctors from just one health care system or hospital, it's important to have choices. I personally want to have as many options as possible in case my kids or I are ever diagnosed with a serious or rare disease. Not every hospital, regardless of how big or how reputable, is able to perform every procedure or provide every treatment. This is something some people often don't consider, and we've had clients who found themselves unable to access necessary care due to limited networks.

A lower Maximum Out of Pocket (MOOP): The MOOP represents the most money you can be billed for covered services in a calendar year. In 2026, the highest allowable MOOP is $9,250. We want our clients on plans with MOOPs that are thousands of dollars lower than that! The most common ways to meet the MOOP are as follows: multiple hospital stay; extensive chemo or radiation therapy; other expensive infused or injected drugs that are administered in an outpatient setting; a lengthy Skilled Nursing stay over 20 days.

A "per stay" hospital co-pay: This guarantees the same flat cost regardless of how long you're in the hospital. This is a top consideration for me when advising clients. Hospitalizations on plans we recommend most range from $200 to $500 regardless if the stay is 1 day or 50. Most plans across the country bill by the day, as much as $400, up to as many as 7 days, meaning a single hospitalization could cost $2,800! We avoid plans with this kind of co-pay! A family member, in both 2024 and 2025, had 4 or more lengthy hospitalizations. Had he been enrolled in a plan with a higher "per day" stay, he would have met his MOOP both years! However, he was enrolled in a plan with a "per stay" hospital co-pay and it saved him almost $8,000.

All current medications are covered and as low cost as possible: The same medications might not be on formulary or cost much more from company to company. Quite often we find clients leaning towards a particular company until we find out a drug isn't covered or costs $1,000 more per year than with other plans.

Generous ancillary benefits: These are the "extras" that neither Original Medicare nor Supplements provide and can include comprehensive dental coverage, vision such as a free eye exam and an allowance for glasses or contacts, Over the Counter (OTC) allowances, a no cost gym membership, and possibly more. Ancillary benefits are what has driven the popularity of Advantage Plans over the past 5 years. Although they're very nice to have and when all things are equal between plans, the amount of ancillary benefits could be the deciding factor. But I think people often put too much value in them. I don't recommend choosing a plan based only on which offers the most "free stuff." Please be warned that ancillary benefits are optional and do not need to be provided. We saw some reductions, especially in dental benefits, in 2026, and I believe that trend will continue into 2027.

You also need to understand that the HMO or PPO plan you buy today can look much different as time passes because companies can change benefits year to year. When Advantage Plans aren't profitable, which they haven't been recently, companies will make some or all of the following adjustments: raise premiums, increase co-pays and the MOOP, add medical or prescription deductibles, provide fewer ancillary benefits. Plans can also be eliminated, as we saw all over the country, including Western Pennsylvania, in 2026.

This is where The Health Insurance Store comes in. We will help you first determine if an Advantage Plan or Supplement is the best fit and then guide you to the right company and plan. As or more importantly, we then provide an annual review prior to the Medicare Annual Enrollment Period (AEP), the 53 days each year when you're allowed to move to a new company and/or plan. This includes informing each client what benefit changes will made to their current Advantage Plan for the upcoming year, and if remaining on it, or moving to a different plan or company should be considered.

If you have any questions regarding today's topic or you would like to make an appointment for a no cost consultation, give us a call, 724-603-3403, or feel free to reach out to me personally by email, [email protected].