5 things to know about Medicare Advantage plans

(Money Magazine) -- 1. The plans can be good deals

This time of year you and/or your parents have some critical decisions to make regarding Medicare (enrollment for 2010 runs through Dec. 31). Among them: Should you go with one of the Medicare Advantage (MA) plans offered by private insurers as an alternative to traditional Medicare?

Such plans, which got a bad rap in the past due to aggressive marketing, must cover the same services as regular Medicare but can do so in different amounts. The monthly premium averages $39 -- on top of the standard $96.40 for Part B -- but generally you get either cheaper care or extra benefits. (Vision and dental are common, as is drug coverage, eliminating the need for Part D.) So it's possible to have lower out-of-pocket costs with MA, says Vicki Gottlich of the Center for Medicare Advocacy.

2. But you can also get burned

Beware of plans that add benefits worth little to you (gym reimbursement, say) and sacrifice worthwhile ones. For example, some make you foot more than traditional Medicare for hospital stays or nursing care, warns Gottlich.

Also understand that the plans typically operate like HMOs and PPOs, with networks of local providers (vs. traditional Medicare, which lets you see any doctor you want). Because you'll pay more to go out of network, MA doesn't make sense if you winter in another state or if your doctors don't participate.

3. You may have fewer options

Because of cutbacks in federal funding and increases in regulation, scads of plans have dropped out for 2010. Research firm Avalere Health reports a 38% dip in offerings over 2009. If you're already in an MA plan, you may be forced to switch. "Still, you'll have multiple options," says Tricia Neuman of the Kaiser Family Foundation. Even if your plan is still offered, reassess before re-upping. Year to year, plan terms may change.

4. Comparing plans isn't as complicated as it seems

Even with fewer choices, figuring out if MA is right for you -- and if so, which plan to pick -- can seem daunting. But it doesn't have to be. Just go to medicare.gov, click Compare Health Plans, and enter your Medicare ID. The tool estimates your out of pocket, including drug costs, in your MA options and traditional Medicare. (Pay attention to nursing and hospital coverage.) You can also call 800-MEDICARE or consult a counselor from your state health insurance assistance program (find one at shiptalk.org).

5. Don't let health reform stop you from signing up

There's been a lot of griping on Capitol Hill lately about the fact that the government pays Medicare Advantage insurers an average of 14% more per beneficiary than it spends on traditional Medicare members. So health reform and other legislation may alter the program in coming years.

But that shouldn't put you off for 2010. No matter what happens, your coverage can't be changed midyear. And you'll have the chance to reevaluate next December.