Many Medicare beneficiaries elect Medicare Replacement Plans. Most don’t realize what they’re giving up to join that type of plan.
When you decide to join a Medicare Advantage Plan, you’re replacing Original Medicare. Then your claims become the responsibility of the insurance carrier you choose.
Medicare pays the insurance company a lump sum annually for each person they enroll in an advantage plan.
How Does a Medicare Replacement Plan Work
Since Medicare replacement plans receive funding from the government the premiums are really low, some are $0. However, in most cases, you have to pay your Medicare Part B premium in addition to any premium by the Medicare Replacement Plan.
Then, the insurance company will handle your claims and coverage determinations instead of Medicare.
If Medicare would’ve approved coverage for a service and the replacement plan denies it, the only thing you can do is file an appeal. Although, it’s much easier to get Medicare to cover something than to get a private insurance company to approve a service.
Additional Benefits of Medicare Replacement Plans
There are some benefits to having a Medicare Replacement Plan. Medicare states that these plans must cover at least the same benefits as Original Medicare.
In most cases, the coverage is minimal and only covers preventative needs. Most seniors that enroll in these benefits need to have something a little better than preventative benefits.
Another benefit some plans use to attract members is a gym membership or transportation benefits to assist the beneficiary in getting to their doctor’s appointments.
Is a Medicare Advantage Plan the Same as A Medicare Replacement Plan
A Medicare Advantage Plan is a Medicare Replacement Plan because it replaces Medicare. Once you enroll in an MA plan, the policy becomes responsible for your claims and coverage.
So, appeals will be sent to the insurance company instead of Medicare.
Medicare Replacement Plans Have Restricted Networks
Original Medicare gives beneficiaries the freedom to see any doctor nationwide that accepts Medicare. Medicare Replacement Plans restrict you to the insurance company’s network of doctors, specialists, and hospitals.
In most Medicare Replacement Plans, there are no out of network benefits unless in an emergency. Keep in mind that the emergency room doesn’t count as an emergency unless admitted.
That decision is made by the plan administrator. Your entire visit could be completely your responsibility with no assistance from your insurance.
Of course, some Medicare Replacement Plans are PPO Networks that allow you to see out of network providers, at a higher cost.
This is better than having no coverage but still can be a huge burden on Medicare Beneficiaries living on fixed Incomes. In most cases, you must see the primary doctor get a referral for a specialist.
These plans lock you in for a calendar year starting January 1st; then, the doctors and providers can leave the networks at any time.
Does Medicare Advantage Replace Medicare
Once you have Medicare Advantage policy the Original Medicare card can go into a safe place because no doctor will need it. The MA policy will be the card you show at medical facilities.
Also, the MA policy is who you’ll call with questions about coverage, not Medicare.
One of the most common problems is a doctor recommends treatment and the plan only covers a less expensive option.
This is because it’s in the best interest of the plan to get you taken care of as inexpensively as possible. Not to get you the best treatment available.
The insurance company already has the funding from taking the Beneficiary off Medicare. Meaning everything they pay comes out of the monies they have already received.
This sometimes results in taking longer to get over an illness because of treatments that are not as effective as what the doctor has recommended.
The Medicare Replacement Plan truly manages your healthcare 100%. You have no choice but to follow the insurance company’s sequence of steps for treatment.
In a time when half of all men and one out of three women get cancer, cancer and specialty hospitals are at the top or should be, of every senior’s list for their coverage.
Most specialty hospitals do not take Medicare Replacement Plans. This is due to not wanting to accept the low payment from those plans.
This means that when you come down with a major illness, it will seriously limit your choices of where you can go for treatment.
With major illnesses, you are covered much more comprehensive with Original Medicare and a Medigap plan.
While the Medigap will cover the majority if not all of the medical cost, over 50% of cost dealing with a major illness can be non-medical.
You should consider a critical illness plan that can provide you with living benefits. A lump sum tax-free payout if you are diagnosed to help offset these non-medical costs.
Can I Switch From a Medicare Replacement Plan Back to Original Medicare
The Medicare Open Enrollment Period from January through March is an opportunity for beneficiaries to change from MA to Original Medicare. Beneficiaries can also change coverage during the Annual Enrollment Period that takes place from October 15 through December 7th of each year.
Also, during Special Election Periods beneficiaries can change coverage. Determining eligibility can be challenging. When you work with a Medicare expert, you’ll save time and money. Our agents can identify your eligibility for coverage, help you find a policy and enroll you in the policy.
For more information, or help on choosing the right plan or plans to fit your needs give us a call today and speak with one of our Senior Medicare Agents. Or you can complete our online rate form to see rates in your area for all Medicare plan types.