What are Medicare Replacement Plans
Common plans that many Medicare Beneficiaries elect every year is Medicare Replacement Plans, or a Advantage Plan (MAPD).
Most do not realize what they are giving up to join that type of plan.
When you decide to join a Medicare Replacement Plan, you’re replacing the Original Medicare that you have worked all your life to become eligible for. It’s replaced with a plan that is administered solely by the insurance carrier that you choose.
Medicare pays the insurance company thousands of dollars per year for each person they take off of Original Medicare.
This is why those type of plans can have little to no premium, however in most cases you will have to continue to pay your Medicare Part B premium in addition to any premium that is charged by the Medicare Replacement Plan.
Medicare Replacement Plans have some additional benefits, however there could be significant fall backs and out of pocket costs that could be otherwise covered.
However, one common misconception is that when you choose a Medicare Replacement Plan you lose your Medicare, why this is not true in a sense, you lose the rights afforded to you by Original Medicare.
Your Medicare is put on a hold status and the plan has an administrator (the insurance company) that decides what you get for health care.
Additional Benefits of Medicare Replacement Plans
There are some benefits of having the Medicare Replacement Plan. Medicare states that these plans must cover at least the same benefits as Original Medicare. Sometimes they will throw in additional benefits.
Unfortunately, in most cases the coverage is minimal and only covers preventative needs, and it is very difficult to find a dentist that takes them.
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.
Most of the time there are additional dental, vision, and hearing plans that cover all three benefits for a premium of about a dollar a day. These plans will cover you significantly better than the add-ons in the Medicare Advantage Plans
Medicare Replacement Plans Have Restricted Networks
When you have Original Medicare you are allowed to see any doctor nationwide that accepts Medicare. When you elect Medicare Replacement Plans, you’re restricted to the insurance company’s network of doctors, specialists, and hospitals.
In most Medicare Replacement Plans, there are no out of network benefits unless it is an emergency. Keep in mind that because you go to the emergency room it does not necessarily constitute and emergency.
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, usually at a higher cost.
However, you still could have to pay the full bill up front and then submit to the insurance company for reimbursed by the plan. Only for the amount that they would have covered.
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 will have to go to your primary doctor in order to get a referral to see any specialist.
The last thing you need to know about these network is that, unlike the plans that lock you in for a calendar year that starts January 1st, the providers can leave the networks at any time.
One of the most common problems that occur is your doctor may recommend a treatment. However, the plan denies it in favor of 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 has already been paid to take they Beneficiary off of 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 fee payout if you are diagnosed to help offset these non-medical costs.
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.