What Are Medicare Advantage Plans

What is the Medicare Advantage Poster showing a Senior Female Raising Her Hand To Ask A Question About Medicare Advantage Plans?

DID YOU KNOW THAT MEDICARE ADVANTAGE IS ALSO REFERRED TO AS MEDICARE PART C

THIS ARTICLE IS WRITTEN TO HELP THE PUBLIC UNDERSTAND NOT JUST WHAT MEDICARE ADVANTAGE PLANS ARE, BUT HOW THEY WORK WHEN IT COMES TO HEALTHCARE.

What is Medicare Advantage? Medicare Advantage Plans are a type of Medicare health plan offered by a private company that contracts with Medicare to provide all your Part A and Part B benefits. Most Medicare Advantage Plans also offer prescription drug coverage. If you’re enrolled in a Medicare Advantage Plan, most Medicare services are covered through the plan. Original Medicare doesn’t pay for your Medicare services. Below are the most common types of Medicare Advantage Plans. 

• Health Maintenance Organization (HMO) Plans

• Preferred Provider Organizations (PPO) Plans

• Private Fee for Service Plans (PFFS) Plans

• Special Needs Plans (SNPs)

HOW MEDICARE ADVANTAGE PLANS WORK?

Medicare Advantage Plans, sometimes called "Part C" or "MA Plans," are an “all-in-one” alternative to Original Medicare. Private companies approved by Medicare offer them.  If you join a Medicare Advantage Plan, you still have Medicare.  These "bundled" plans include Medicare Part A (Hospital Insurance), Medicare Part B (Medical Insurance), and usually Medicare Prescription Drug Plan (Part D).

WHAT ARE MEDICARE ADVANTAGE PLANS, AND DO MEDICARE ADVANTAGE PLANS COVER PRESCRIPTION MEDICATIONS?

What are Medicare Advantage Plans? Medicare Advantage Plans cover all Medicare services.  Some Medicare Advantage Plans also offer extra coverage, such as vision, hearing,, and dental coverage. 

 

ARE THE RULES DIFFERENT FOR MEDICARE ADVANTAGE THAN THEY ARE FOR ORIGINAL MEDICARE?

Medicare pays a fixed amount to the companies offering Medicare Advantage Plans each month for your care. These companies must follow rules set by Medicare. Each Medicare Advantage Plan can charge different out-of-pocket costs. They can also have different rules for how you get services, like:

• Whether you need a referral from your Primary Care Physician to see a specialist.

• If you have to go to doctors, facilities, or suppliers that are part of the plan for non-emergency or non-urgent care.

• These rules can change each year.

  
  

WHAT ARE MEDICARE ADVANTAGE PLANS & HOW MUCH DO THEY COST?

What you pay in a Medicare Advantage Plan depends on several factors. Like the type of plan, the size of the network, and what ancillary products are included. Also, plans are generally priced by county so that prices can vary quite a bit from city to city and state to state.

 

ARE PRESCRIPTION MEDICATIONS COVERED UNDER MEDICARE ADVANTAGE PLANS?

The Medicare Advantage Plans include Prescription Drug Coverage (Part D). You can join a separate Medicare Prescription Drug Plan with certain types of plans that:

• Can’t offer drug coverage (like Medicare Medical Savings Account plans)

• Choose not to offer drug coverage (like some Private Fee-for-Service plans)

  
  

Note: You’ll be disenrolled from your Medicare Advantage Plan and returned to Original Medicare if both of these apply:

• You’re in a Medicare Advantage HMO or PPO.

• You join a separate Medicare Prescription Drug Plan.

  
  

DO MEDICARE ADVANTAGE PLANS WORK WITH MEDICARE SUPPLEMENT PLANS?

Medigap policies can't work with Medicare Advantage Plans.

CAN ANYONE JOIN A MEDICARE ADVANTAGE PLAN?

MOST EVERYONE CAN ENROLL IN ONE OF THESE MA/MAPD PLANS

• Health Maintenance Organization (HMO) Plans

• Preferred Provider Organizations (PPO) Plans

• Private Fee for Service Plans (PFFS) Plans

• Special Needs Plans (SNPs)

What are MEDICARE ADVANTAGE PLANS? YOU ARE ELIGIBLE FOR MEDICARE ADVANTAGE AS LONG AS THESE APPLY TO YOU:

• You live in the service area of the plan you want to join. The plan can give you more information about its service area. If you live in another state for part of the year, ask if the plan will cover you there.

• You have Medicare Part A and Part B.

• You don't have End Stage Renal Disease (ESRD).

HOW TO JOIN, SWITCH, CHANGE, OR DROP A MEDICARE ADVANTAGE PLAN

HOW TO SWITCH OR CHANGE MEDICARE ADVANTAGE PLANS

What are Medicare Advantage Plans? When is the time to change or switch your Medicare Advantage plan? If you're already in a Medicare Advantage Plan and want to switch, follow these steps:

• To switch to a new Medicare Advantage Plan, join the plan you choose during one of the enrollment periods. You'll be disenrolled automatically from your old plan when your new plan's coverage begins.

• To switch to Original Medicare, contact your current plan or call us at 1-800-MEDICARE.

  
  

Unless you have other drug coverage, you should carefully consider a Medicare Prescription Drug Plan (Part D). You may also want to consider a Medicare Supplement Policy or a Medigap Plan. Remember, you may only be able to switch plans at certain times of the year.

 

WHAT ARE MEDICARE ADVANTAGE PLANS IF YOU HAVE OTHER HEALTH INSURANCE

Talk to your employer, union, or other benefits administrator about their rules before you join a Medicare Advantage Plan. In some cases, joining a Medicare Advantage Plan might cause you to lose employer or union coverage. If you lose coverage for yourself, you may also lose coverage for your spouse and dependents.

In other cases, you may still be able to use your employer or union coverage along with the Medicare Advantage plan you join.

Note: Remember, if you drop your employer or union coverage, you may not be able to get it back. 

WHAT HAPPENS IF YOUR PLAN IS EVER DISCONTINUED?

At the end of the year, plans can decide to leave the Medicare Program. If your plan leaves, you'll get a letter explaining your options. Generally, you'll be automatically returned to Original Medicare if you don't choose to join another Medicare Advantage Plan. You will also have the right to buy a Medigap policy. No matter what you choose, you're still in the Medicare Program and will get all Medicare-covered services. If you choose to return to Original Medicare, you need to decide whether you want drug coverage. If so, you need to join a Medicare Prescription Drug Plan (Part D).

WHAT IF I RECEIVE HEALTH INSURANCE FROM YOUR EMPLOYER

It’s essential to understand how your current coverage works with Medicare. If you have questions about your current insurance, the best source of information is your benefits administrator, insurer, or plan provider.

 

IF YOU NEED TO APPLY FOR MEDICARE PART A AND/OR MEDICARE PART B

Some people get Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) automatically, and other people have to sign up for them. In most cases, it depends on whether you’re getting Social Security benefits. 

Note:

• Medicare is managed by the Centers for Medicare & Medicaid Services (CMS). Social Security works with CMS by enrolling people in Medicare.

• You don’t need to sign up for Medicare each year. However, each year you’ll have a chance to review your coverage and change plans.

WHAT IS A MEDICARE HEALTH PLAN?

MEDICARE HEALTH PLANS ARE USUALLY ONE OF THE FOLLOWING HEALTH PLANS

• A private insurance company offers it.

• Contracts with Medicare to provide Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) benefits.

• Provides these benefits to people with Medicare who enroll in the plan.

MEDICARE HEALTH PLANS INCLUDE

• Medicare Advantage Plans (Medicare Part C)

• Other Medicare Health Plans

  • Medicare Supplement Plans or Medigap

  • Demonstrations/Pilot Programs

  • Programs of All-inclusive Care for the Elderly (PACE)

 

WHAT IS A MEDICARE ADVANTAGE NETWORK?

Medicare Advantage Plans offer lower premiums but require you to use their own networks of Doctors and Hospitals, which enables them to lower their costs. A Medicare HMO (Health Maintenance Organization) usually requires you to see only network providers, except in emergencies. You'll need to select a primary care physician. That physician will authorize and coordinate a referral if you need to see a specialist.

Medicare HMO plans are the most significant type of Medicare Advantage networks. HMOs make up over 70% of the Medicare Advantage marketplace. Medicare PPO (Preferred Provider Organization) networks allow you to see doctors outside the network, but you will expect to pay much higher out-of-pocket costs to do so.

In limited counties, there are Medicare Private-Fee-for-Service plans. These plans may or may not include Part D. How you access care is also different. While this plan type was once prevalent, it has been gradually phased out in most areas. 

Some people may feel that the rules restrict or limit them in ways they find disagreeable. However, others are willing to abide by the rules if they see a plan with an attractive low premium.

It’s a personal choice. If you are deciding between Medicare Advantage and Original Medicare with a Medicare Supplement plan, you’ll want to consider some of the rules before you enroll.

HERE ARE SOME BASIC MEDICARE ADVANTAGE RULES

• You have to be enrolled in both Medicare Part A & B and live in the service area of the Plan. Some Medicare beneficiaries believe they can drop Part B if they enroll in Medicare Advantage. That is not true; if you drop Part B while enrolled, you will immediately be kicked out of your Medicare Advantage plan.

• The only health-related question on the Medicare Advantage enrollment application is...out-of-pocket. Have you been diagnosed with End-Stage Renal Disease (kidney failure)?

• Use network doctors and hospitals for the lowest out of pocket costs. Plans may have HMO or PPO networks. Most Medicare HMO plans do not cover out-of-network care except in emergencies. In PPO networks, seeing a provider outside the network will result in substantially higher spending.

• It is your responsibility to gain prior authorization for specific procedures, especially in Medicare Advantage HMO plans.

• You must obtain a referral from your primary care physician before seeing a specialist on many HMO plans.

WHEN CAN YOU ENROLL IN A MEDICARE ADVANTAGE PLAN?

Medicare Advantage plans have lock-in periods. You can enroll in one during the Initial Enrollment Period when you first turn 65. After that, you may enroll or dis-enroll only during certain times of the year. Once you enroll in Medicare Advantage, you must stay enrolled in the plan for the rest of the calendar year. You can only opt out of an Advantage plan during specific times of the year.

The Annual Election Period in the fall is the most common time to change your Medicare Advantage plan. This period runs from October 15th to December 7th each fall. Changes made to your enrollment will take effect January 1.

If you decide to leave a Medicare Advantage plan and return to Original Medicare, you must notify your Medicare Advantage plan carrier. Otherwise, Medicare will continue to show that you are enrolled in the Advantage plan instead of Medicare.

WHAT IS THE MEDICARE ADVANTAGE OPEN ENROLLMENT PERIOD (OEP?

DID YOU KNOW THAT ONCE YOU CHOOSE A MEDICARE ADVANTAGE PLAN, YOU WILL MOST LIKELY NEED TO STAY IN THAT PLAN FOR THE ENTIRE CALENDAR YEAR?

Some people don’t realize this and enroll in Medicare Advantage plans without an agent's help. Therefore, they don’t know about all of these rules. Sometimes they find themselves enrolled in a plan that their doctor doesn’t accept or that doesn’t include one of their medications. This happens most often in January after a person has used the Annual Election Period to join a Medicare Advantage plan. The Medicare Open Enrollment Period runs from January 1st to March 31st each year. During this time, you can disenroll from any Medicare Advantage plan and return to Original Medicare. You may add a standalone Part D Prescription Drug Plan.

During the Medicare Advantage Open Enrollment Period, you can also change from your current Medicare Advantage plan to a different Medicare Advantage plan. Please be aware that you can only use this period once per calendar year.

 

IS ORIGINAL MEDICARE THAT MUCH different from MEDICARE ADVANTAGE PLANS?

The intent of our lawmakers in creating these plans was to give you options in accessing your Medicare benefits. Listed below are some of the reasons why people might choose a Medicare Advantage plan:

• Many plans have low monthly premiums (although you must continue to pay your Medicare Part B Premium)

• You pay for medical services as you use them through co-pays and coinsurance.

• Unlike Original Medicare, Medicare Advantage plans have an out-of-pocket maximum to protect you against catastrophic spending.

• The convenience of having your medical and Part D Prescription Drug benefits rolled into one plan.

• Some plans may include benefits for things like limited vision coverage. Limitations, co-payments, and restrictions may apply.

 

RE-CAPPING YOUR MEDICARE OPTIONS

You can either opt for Original Medicare (Medicare Parts A & B) and supplement it with a Medigap plan or a Medigap plan and/or a Medicare Prescription Drug plan (Part D), or you can choose a Medicare Advantage plan (Medicare Part C). A Medicare Supplement or Medigap plan will pick up the tab for all or part of your deductibles and coinsurance under Original Medicare (the level of coverage you get depends on the Medigap plan you choose). A Part D plan will provide prescription coverage.

A Medicare Advantage plan wraps everything in one policy: It includes all of the benefits of Original Medicare, has a cap on annual out-of-pocket costs, and most Medicare Advantage plans also include prescription coverage. 

I personally understand that many people are easily "seduced" and "swayed" by the content of Medicare Advantage Advertisements.  The truth is, however, that all Medicare Advantage plans are limited to specific geographic areas, meaning not all plans or Plan Benefits are available everywhere.  

With MOOP expenses ranging from $3,000 to $12,000 annually, the vast majority of Medicare Advantage plans cannot compare to Medigap plans in terms of having a consistent cost for your healthcare.  

When times are good, you can end up spending very little for your healthcare needs.  However, if you have a bad year here and there, you can expect to pay up to your Maximum-Out-Of-Pocket (MOOP) Expense, which can be devastating to many Medicare beneficiaries. When comparing plans, I encourage anyone leaning toward a Medicare Advantage plan to consider Medigap Premiums as their MOOP.  Because Medicare Supplements C, D, F, G, N will pay all of your costs (meaning your 20% share from Original Medicare) and if you are new to Medicare your annual premiums are only around $1,500 a year when you are first eligible, you never have to worry about not being accepted later in the event you have a serious illness or condition. You have the freedom and flexibility to see any Doctor or go to any Hospital in the country that accepts Medicare.