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How Seniors Choose Between Traditional Medicare and Medicare Advantage

Eligible seniors 65 and older have two main options when it comes to their Medicare benefits: traditional (or Original) Medicare and a Medicare Advantage (MA) plan. Each year, seniors can review their existing coverage and look for other options during the Annual Enrollment Period (AEP) between October 15 and December 7. Today, we’re going to take a look at how and why beneficiaries choose between traditional Medicare and Medicare Advantage plans with the help of the results of The Commonwealth Fund’s 2022 Biennial Health Insurance Survey.

How do Seniors Choose Between Traditional Medicare and Medicare Advantage


As of 2022, 55% of Medicare beneficiaries are enrolled in Original Medicare, with or without supplemental and Part D (prescription drug) insurance. Studies indicate that the number of seniors choosing Medicare Advantage over traditional Medicare is growing every year, with the share of those choosing MA over Original Medicare expected to surpass 50% by 2025.


The first thing to understand about why seniors go in one direction or the other is that there are pros and cons to both Original Medicare and Medicare Advantage and beneficiaries must weigh these trade-offs before deciding which direction to go.


For example, Medicare Advantage plans typically provide benefits that are not included with traditional Medicare such as hearing aids, eyeglasses, and dental care. This means that seniors who opt for Original Medicare will pay for these services out-of-pocket. On the other hand, seniors who choose traditional Medicare can receive Medicare covered services from any health care provider or medical facility that accepts Medicare assignment, whereas most Medicare Advantage plans come with a network of providers and require a referral from a primary care physician as well as plan approval to see a specialist.


The Biennial Health Insurance Survey asked people aged 65 and older who were enrolled in Medicare why they chose Medicare Advantage or traditional Medicare, and what resources they used to choose their coverage.


Why did seniors make their Medicare decisions?


Why seniors chose traditional Medicare or Medicare advantage:


1. The most common reason that seniors chose a Medicare Advantage plan over traditional Medicare was the extended benefits (24%).

2. The second most common reason seniors chose a Medicare Advantage plan over traditional Medicare was the annual out-of-pocket maximum that comes with Medicare Advantage plans (20%).

3. On the other hand, greater choice in healthcare providers was the most common reason given for choosing traditional Medicare over Medicare Advantage. This was true for beneficiaries with supplemental insurance at twice the rate as for those without it.



Kupuna shared how they made their choice to go with MA or Original Medicare, though 40% of seniors said that they did not receive any help with their choice. Of the people who had help:

  • About 30% of seniors spoke with an insurance broker

  • About 18% spoke to friends and family

  • About 7% used the Medicare hotline or Medicare.gov

  • About 5% found information in an advertisement on TV or somewhere else

  • About 4.5% used their state health insurance assistance program

Conclusion


More and more kupuna are choosing Medicare Advantage plans over traditional Medicare, and many beneficiaries are looking for support to help them make their coverage decisions. The majority of Medicare beneficiaries who seek help for which way to receive their coverage rely on one-on-one support provided by brokers and agents so it’s very important for seniors to find a local insurance broker who is knowledgeable and trustworthy.



Our independent insurance agents are dedicated to assisting people on Medicare and those who are ready to transition from employer coverage to personal retirement coverage. We help kupuna understand their benefits options and apply for additional coverage, as needed. We are the only insurance agency in Hawaii contracted with EVERY Medicare Advantage plan, which means we are able to offer unbiased advice; all at no cost to our clients.


At PBC, our clients are our number one priority and we look forward to getting to know you and your needs. Call us today at (808) 738-4500 to see how we may be of assistance.

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