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When Americans turn 65 or retire, they face an important decision: Should they get traditional Medicare or choose Medicare Advantage? In commercials featuring celebrities such as former Los Angeles Lakers point guard Earvin “Magic” Johnson, insurance companies are heavily promoting the latter.

There are pros and cons between traditional Medicare insurance and Medicare Advantage, and sorting out the differences is often confusing. To discuss the two options, How We Care spoke with KFF's Tricia Neuman, who leads the health organization's Medicare research.

In this interview, which has been condensed for clarity and length, Neuman explains what factors older Americans and their caregivers should consider before choosing Medicare insurance and the risks associated with that decision.

Spotlight PA: Can you explain the differences between Medicare Advantage and traditional Medicare?

Neuman: Traditional Medicare is what people think of as the national program that provides Medicare benefits.

Medicare Advantage are plans operated by private insurance companies, such as UnitedHealthcare and Humana, that receive payments from the federal government to provide benefits to program participants. So one is a public option, the other is a privatized version.

Essentially, the federal government provides money to insurance companies so they can offer Medicare Advantage.

When you turn 65, you see a lot of commercials on TV for Medicare Advantage plans, and … you don't see commercials for traditional Medicare plans. So a lot of people are attracted to Medicare Advantage, and for a lot of good reasons.

What are some of those good reasons? I know that many Medicare Advantage plans cover dental and vision, while traditional Medicare plans do not.

The additional benefits are a big incentive. People are particularly concerned about the cost of dental care. And virtually all Medicare Advantage plans offer dental care, vision care, and hearing care. They also offer other benefits that people find very attractive, such as debit cards for purchasing over-the-counter drugs.

Even so, the average Medicare beneficiary who chooses a Medicare Advantage plan has a choice of 43 different plans in their area. Comparing these plans can be very confusing because they differ in many ways. They differ in benefits. They differ in additional services. They differ in provider networks. They differ in drugs on the drug list.

A growing concern about Medicare Advantage is that some of these plans have relatively narrow networks.

With traditional Medicare insurance, you can see virtually any doctor and hospital and get help from any home health agency in the country. If they're accepting new patients, they're likely to accept Medicare patients as well. With a Medicare Advantage plan, people are more likely to work within a network.

It works like a conventional insurance policy.

This means that with a PPO, for example, you'll pay more if you go out of network. With an HMO, you might pay 100% of the rate if you go out of network.

This is an important issue for older people who travel a lot, especially if they stay in one place for an extended period of time. Networks are a way for insurers to control costs to some extent. It can also be a problem for the sick. Years ago, we looked at the extent to which Medicare Advantage plans had cancer clinics and teaching hospitals in their network, and the numbers varied widely.

Often, people make these decisions about their health insurance coverage when they are still relatively healthy. It is only when something medically unexpected happens that they may learn that the hospital they want to go to or a specialist is out of network.

I want to go back to another reason why people choose Medicare Advantage. It's a one-stop shopping option. They don't pay an additional premium (Medicare Part D) for their drug coverage or for these additional services. And that's a significant advantage for people on fixed incomes.

Let's say I sign up for Medicare Advantage at 65. But then the network changes the time. What happens then?

It's really important for the insured to check the network every year, and that's really difficult. The onus is kind of on the individual to make sure that the doctors and hospitals that they thought were in the network are actually in the network from one year to the next.

Comparing networks of different tariffs is almost impossible. There is a provision that says that if there is a significant change in the middle of the year, people have the opportunity to unsubscribe and choose a different tariff.

Can it happen that aspects of the network are changed in the middle of the year?

Neuman: That can happen, and it has happened.

Another issue with Medicare Advantage that has recently received a lot of national attention is the use of prior authorizations. On the surface, prior authorizations are not necessarily bad. They can control the cost of health care and prevent unnecessary tests and procedures. However, there are concerns about the extent to which Medicare Advantage plans are using this tool. What do you think?

Well, we know for a fact that they use this tool extensively. Most requests are not denied. But the problem is that it creates hassle and administrative burden for providers. It can cause significant delays in healthcare or prevent people from getting the treatment that their doctors believe they are entitled to. That's why it is under such close scrutiny.

More and more doctors and hospitals are starting to speak out on this issue because it is a huge burden for them. With Medicare Advantage now covering more than half of Medicare patients, more and more of their patients are being faced with authorization requests, which is time-consuming for doctors' offices and hospitals and impacting patient care.

Can you give an example?

Hospitals talk about difficulties in discharging patients to nursing homes or skilled nursing facilities. So, you may have a patient come in who needs post-acute care, but the insurance company puts up a barrier and says, “No, we're not sure if this person needs post-acute care. Maybe they can go right home.” So there's a pre-authorization designation for that type of service.

[The Centers for Medicare & Medicaid Services] actually introduced some rules this year to set criteria that plans must follow when it comes to imposing preauthorization rules on doctors — for example, what kind of evidence they require. And if traditional Medicare covers something, they have to cover it, too.

One problem for consumers is that there is little way to compare plans and find out which companies are more likely to obtain pre-authorization for specialty drugs, chemotherapy or home health care. That would be helpful when considering which plan to choose.

So when you're considering whether to use Medicare Advantage or traditional Medicare, you should think about what your future health care needs will be, because 65 and 95 are two different things.

Not everyone can afford Medigap insurance. Even people who think, “Oh, I'd really like the flexibility to choose my doctor and go anywhere I want if I get sick,” can't afford Medigap and think it's too financially risky.

Others say, “I’m healthy and I’m going to choose a Medicare Advantage plan,” without really thinking about what they’ll need when they get older.

Unfortunately, people don’t really compare their plans from one year to the next,

Many people simply stick with the plan they chose at 65 and don't review their options every year. They may end up with a plan that seemed good when they first signed up, but it has changed a lot over the years and they only realize that now because they are sick and using benefits.

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