Medicare Advantage Plans (Part C)
Medicare Advantage plans are also referred to as Medicare Part C; these plans include coverage equal to or better than Medicare Part A and Part B, and some plans even include Medicare Part D Prescription Drug coverage.
Under the Balanced Budget Act of 1997, signed into law by President Bill Clinton, Medicare Advantage plans were established. Congress designed the Medicare Advantage program to give Medicare beneficiaries a lower-premium option than Medicare Supplements.
There are many reasons why people choose Medicare Advantage plans, they have little Medicare underwriting, which means they provide coverage options for people who missed their Medicare Supplement Open Enrollment Period window and now can’t qualify for a Medigap policy due to health issues.
Medicare Advantage plans aren’t like Medigap plans, they are two totally different coverage options. When you enroll into a Medicare Advantage plan you will receive benefits from a private insurance company instead of original Medicare. You’ll occasionally hear Medicare Advantage plans called Medicare replacement plans.
How do Medicare Advantage Plans Work?
Medicare Advantage plans are private Medicare insurance plans that Medicare beneficiaries may join as an alternative to Medicare. When you are enrolled into a Medicare Advantage plan, Medicare pays the plan a fee every month to administer your Part A and Part B benefits.
You must stay enrolled in Medicare Part A and Medicare Part B to receive Medicare Advantage plan benefits. Medicare Advantage plans are funded on the money Medicare pays the Medicare Advantage company on your behalf to take on your medical risks.
When it comes time for treatment, you’ll present your Medicare Advantage plan ID card at the time of treatment. The providers you see will bill the plan instead of Original Medicare. Therefore, many providers consider Medicare Advantage plans more like a Medicare replacement plan.
You can always return to Original Medicare during the Annual Enrollment Period which takes place from October 15 through December 7th of every year.
In 2019 the Medicare Advantage Open Enrollment Period will return, giving beneficiaries a second chance to make a one-time switch from one MA plan to another MA plan or to return to Original Medicare.
Each MA plan has its own Summary of Benefits. In your Summary of Benefits, you will find information on copays for various healthcare services. Each MA plan will offer all the same services as Original Medicare, like doctor visits, surgeries, lab work and so on.
Many primary care doctor visits will be around $10 and $50 for most specialist copays. Some higher copays or coinsurances may be expected for diagnostic imagines, hospital stays, and surgeries. This does vary greatly between states, so it’s important to review plans in your area.
One of the best parts about Medicare Advantage plans is that many of them include minor benefits for routine dental, vision or hearing. Some plans even include a gym membership or access to silver sneakers.
Most Medicare Advantage plans have an HMO or PPO network, this is the price you pay for lower premiums that MA plans offer.
Many HMO networks require that you see a provider within the network to receive coverage, except in an emergency. You will have to select a primary care physician that accepts the plan, this provider will coordinate a referral if you need to see a specialist.
Most MA plans have an HMO network, they represent 71% of all Medicare Advantage plans available on the market.
Medicare PPO networks allow you to see doctors outside the provider network if you are willing to pay a substantially higher out-of-pocket spending amount.
Few counties offer them, but they are still available; Medicare Private-Fee-for-Service plans may or may not include Part D. Accessing care with these plans is also very different, PFFS plans used to be common in the past, but they are slowly being phased out.
Many people feel like the rules are restricting and limit them in ways that are disagreeable. Yet, many have found they are willing to abide by strict rules when the plan has an attractive low premium.
If you are considering a Medicare Advantage plan you should consider the rules before you enroll.
Rules Medicare Advantage Plans Require You to Follow
Some of these rules may seem obvious; like you need to be enrolled in both Medicare Part A and B, you need to live in the plans service area and you can’t have End Stage Renal Disease (kidney failure).
Some beneficiaries have thought they could drop Part B if they are enrolled in a MA plan, this isn’t true, if you drop Part B, you’ll immediately be kicked out of your Medicare Advantage plan.
If you have End Stage Renal Disease, you won’t qualify for a Medicare Advantage plan. There are some Medicare Advantage Special Needs Plans that specifically serve individuals with ESRD, these are only available to those that live in the service area.
If you’re a new Medicare beneficiary, you might qualify for the Medicare Supplement Open Enrollment Period which would mean there are no underwriting questions related to health issues.
If you are a disabled individual looking for a Medicare Advantage plan, you should also talk to an Insurance Agent licensed in your state about Special Needs Plans that may be available to you.
With a Medicare Advantage plan you will need to use network doctors and hospitals for the lowest out of pocket costs. Most HMO plans don’t cover anything out of network, and PPO networks will result in much higher healthcare spending.
For many Medicare Advantage plans you will need to get prior authorization for certain procedures. Obtaining a referral from your primary care physician before seeing a specialist is also a requirement of many Medicare Advantage plans.
If you have a Medicare Advantage plan, you can put your red, white and blue Medicare card in a safe place. There is no reason to give it to any of your healthcare providers. If they bill Medicare, the bill will be rejected. Your providers will need to bill your Medicare Advantage plan.
When you enroll in a Medicare Advantage plan you are agreeing, for the rest of the calendar year, to be covered by the plan instead of Original Medicare.
Medicare Supplement vs Medicare Advantage
It’s certain that a Medigap policy with Original Medicare will give you the most comprehensive coverage. The big difference is that with a Medicare Supplement you can see any doctor that accepts Medicare Assignment. You won’t have to ask doctors if they take your specific company, the network is Medicare, which has over 800,000 providers. The network is nationwide, not local.
Medicare Supplement plans also have fuller coverage on the back end. Medicare pays 80% and your supplement will cover the remaining 20%, leaving you with little out-of-pocket expense. There aren’t repetitive copays like in a Medicare Advantage plan.
Medicare Supplements keep the same coverage benefits year after year, this means you won’t have to reevaluate your plan annually like in a Medicare Advantage plan.
While Medicare Advantage plans typically offer Part D Prescription Drug coverage, Medicare Supplement policies don’t include this. They also don’t offer any routine dental, vision or hearing, while some MA plans may at least have a little bit of coverage.
Whichever plan you choose is your choice, both have benefits and they have coverage that works differently. Go with the option that feels right to you; whether it’s a Medical Savings Account, Medicare Supplement or Medicare Advantage plan, the coverage that is best for you can only be determined by you.
It’s common for beneficiaries to ask which plan the best is, and this varies based on personal factors. The plan that is best for your friend or neighbor may not be the best plan for you. There is no need to make a mistake on something as critical as your health insurance, we have experienced licensed insurance experts who can explain all your options to you.