Liz Weston: Are Medicare Advantage plans worth the risk?

About 1 in 3 people 65 and older in the U.S. enroll in Medicare Advantage, the private insurance alternative to traditional Medicare. It’s not hard to see why: Medicare Advantage plans often cover stuff that Medicare doesn’t, and most people don’t pay extra for it.

But Medicare Advantage can be more expensive if you get sick because copays and other costs can be higher, says Katy Votava, president of Goodcare.com, a health care consultant for financial advisors and consumers.

Unhappy customers who want to switch back to traditional Medicare may find they no longer qualify for the supplemental policies to help pay their medical bills, or that they would face prohibitively high premiums.

“These are complicated products,” says Votava, author of “Making the Most of Medicare.” “They’re like nothing else, no other insurance that people encounter anywhere until they get to Medicare.”

MEDICARE’S ALPHABET SOUP

The first hurdle many people face when deciding about Medicare coverage is simply understanding how the various parts fit together. Traditional Medicare, also known as original Medicare, has two parts:

— Part A covers hospitalization and is typically premium-free.

— Part B covers outpatient care, including doctor visits, and has a standard monthly premium of $144.60 for 2020, although higher-income people pay more.

You can choose any doctor who accepts Medicare, and most do. The government pays health care providers directly.

Part D is prescription drug coverage, which is provided by private insurers. The drugs that are covered and the amounts you pay out of pocket vary widely. Monthly premiums vary as well but average $32.74 in 2020.

Traditional Medicare has deductibles, copays and coinsurance that can quickly add up. To cover these gaps,...