Medicare Advantage Plans vs Medicare Cost Plans is something many adults are trying to understand. Across the nation, seniors 65+ receive healthcare coverage through the nation’s federally funded health care insurance program known as Original Medicare.
Individuals receiving Social Security benefits may have automatic enrollment in both parts. Although, the program may not cover the costs of all health care services.
Due to this, some beneficiaries may find themselves paying for certain services out-of-pocket. Things like routine dental or vision care aren’t part of Part A or Part B coverage. Individuals needing these services may seek alternative options for health insurance.
Medicare Advantage Plans vs Medicare Cost Plans
Eligible enrollees needing care exceeding what Parts A and B covers, may consider an Advantage plan or Cost plan to receive Medicare benefits. The government administers Medicare while private insurance companies that contract offers for Advantage and Cost plans.
Comparing the two alternatives, Medicare Advantage Plans vs Medicare Cost Plans is a good idea for beneficiaries seeking additional health-care benefits.
Many confuse the two plans because private insurance companies provide both options. However, these alternatives are widely different. Beneficiaries should understand how each Medicare-alternative insurance option works, before deciding what plan is the best option for coverage.
Medicare Advantage Plans
Also known as Part C, Advantage policies must include coverage equivalent to that of Parts A and B. Although, coverage comes from a private insurance company rather than through Medicare.
Most Advantage plans include coverage for prescription drugs, otherwise known as Part D. Individuals with Medicare insurance must enroll in a stand-alone Part D Prescription Drug Plan for medication coverage.
Additionally, routine vision, hearing, and dental are often part of Advantage plan benefits. Although, beneficiaries must continue to pay the Part B premium.
Costs of service may vary depending on the type of Advantage plan. Plan types include PPO, HMO, HMO-POS, SNP, and PFFS. Each type provides different benefit options. Beneficiaries should compare each type before enrolling.
Medicare Advantage Eligibility
Advantage plans require prospect enrollees to first have Parts A and B coverage. Individuals may not enroll in these plans without coverage from both parts.
Other eligibility factors include where a beneficiary resides. The permanent residence of a member must be within the plan’s service area.
However, any individual with an end-stage renal disease (ESRD) diagnosis may receive coverage under Parts A and B. While this may be true, ESRD patients may not enroll in Advantage plans unless otherwise specified (only in rare cases).
Medicare Cost Plans
Private insurance companies in certain parts of the country offer Cost Plans as another alternative health insurance option. Cost Plans are not available in all parts of the country, availability depends on the insurance carrier, not Medicare.
Like Advantage plans, Cost plans provide coverage for benefits like hearing, vision and dental as well as prescription drugs. These plans are often said to be a “hybrid” of Advantage and Medigap plans. Many qualities from both options are present in Cost plans.
Although, in 2019 some carriers must discontinue Cost plans in areas where at least two Advantage plans were available in the prior year. However, plans must meet certain enrollment thresholds. Cost plans operate similar to how HMOs (Health Maintenance Organizations) do.
One factor that separates this plan from other options, is if a member receives services from an out-of-network provider without a referral, services have coverage through Medicare.
Unlike Advantage plans, beneficiaries with only Part B coverage may join a Cost plan. Meaning, individuals may enroll in Cost plans even if they only have Part B coverage, Part A coverage isn’t mandatory.
Medicare Advantage Plan vs Medicare Cost Plan Enrollment
Beneficiaries have alternative options for Medicare, but the times to enroll may be specific. Before choosing a health care plan, members must understand how and when each enrollment period works.
Enrolling in an Advantage Plan
The first option to enroll in an Advantage plan is during the Initial Coverage Election Period (ICEP). For the majority, this period is the same as the Initial Enrollment Period (IEP); which is specific to an individual’s 65th birthday.
The first time a person may enroll in Parts A and B are during the 7-month initial enrollment window. For those eligible, the IEP begins 3 months before, the month of, and three months following an individual’s 65th birthday.
Beneficiaries or the legal representative needs to finish a request for enrollment. This must include all the information necessary for processing the enrollment or requests must meet Medicare’s criteria of enrollment. Including, being enrolled in both Parts A and B before enrolling in an Advantage plan.
However, individuals Advantage-eligible may use the Annual Election Period (AEP) to enroll or disenroll from Part C plans. Every year from October 15th until December 7th beneficiaries may make changes to their current plan or enroll in a new plan. Any changes allowed outside of this time may be limited.
Enrolling in a Cost Plan
Certain areas of the country offer a type of HMO plan known as Cost Plans. As for the enrollment or dis-enrollment of these plans, it’s a bit different.
Eligible enrollees may enroll if they only have Part B coverage. Enrollment in Part A coverage isn’t necessary to apply for Cost Plans.
Beneficiaries may join a Cost Plan at any time that it’s accepting of new members. In addition, disenrolling or leaving a Cost Plan to return to Medicare coverage may also happen at any time.
Following enrollment, beneficiaries may need coverage for the costs of medications. Members may receive drug coverage from Cost Plans (if they provide it). Otherwise, members may purchase a stand-alone Prescription Drug Plan; better known as Part D.
Get Help Choosing Coverage
Medicare is never easy to understand, especially as policies and requirements change. Our team of licensed agents is happy to help clear up any confusion you may still have about coverage.
Many seniors end up with gaps in benefits due to a lack of understanding of their options for health insurance coverage. Certain situations and circumstances may be qualifying factors for coverage or special enrollment periods.
Contact one of our agents today by calling the number above. If you prefer, you may also fill out an online rate comparison form. We are happy to walk you through this process and answer any questions along the way. All services are free of charge, no commitment necessary.