Medicare Advantage, also known as Medicare Part C, makes it possible for people with Medicare Part A (hospital insurance) and Part B (medical insurance) to receive their Medicare benefits in an alternative way. Medicare Advantage plans are offered by private insurance companies contracted with Medicare and provide at least the same level of coverage that Medicare Part A and Part B provide.
You may be wondering which is the better choice: sign up for a Medicare Advantage plan or Original Medicare. There isn’t a simple answer because Medicare Advantage plans have key features that many people find attractive and other characteristics that may not match with your personal preferences and/or lifestyle. Let’s take a closer look at some of the important pros and cons of Medicare Advantage plans.
Medicare Advantage plans often provide more benefits than you would receive under Original Medicare.
Medicare Advantage plans must offer at least the same level of coverage as Medicare Part A and Part B and many plans offer added benefits. These may include coverage for routine vision care, hearing aids, routine dental care, prescription drug coverage, and fitness center membership.
Medicare Advantage plans may cost you less.
If you enroll in a Medicare Advantage plan, you continue to pay your Medicare Part B premium and you may pay an additional premium. The insurer determines the Medicare Advantage plan’s premium, which can vary from one Medicare Advantage plan to another. Some Medicare Advantage plans may have premiums as low as $0.
Your cost sharing may also be less under Medicare Advantage. For, example, if you visit a primary care physician under Medicare Advantage, you may pay a co-payment of $10. However, if you visit a primary care physician under Original Medicare, you may have a coinsurance of 20%, which could be more than $10.Also, a Medicare Advantage plan limits your maximum out-of-pocket expense. Once you have spent that maximum, you pay nothing for covered medical services for the remainder of the year. Original Medicare does not provide a maximum out-of-pocket cap, so your potential expenses are limitless.
Often a Medicare Advantage plan can be less expensive than comparable coverage you would receive if you stayed with Original Medicare. To get all the benefits of Medicare Advantage with Original Medicare, you would also need to enroll in a stand-alone Medicare Part D Prescription Drug Plan as well as a Medicare Supplement plan.
Medicare Advantage plans coordinate care among your health care providers
Typically Medicare Advantage plans are managed care and have networks of contracted health care providers. Example would be Health Maintenance Organization (HMO) Medicare Advantage plans. These HMO plans require you to select a Primary Care Physician (PCP) who helps to coordinate your care.Medicare Advantage plans that include prescription drug coverage may also have medication therapy management. This care coordination can be a convenience and a valuable aid to your health.
Medicare Advantage plans can serve as your “one-stop” center for all your health and prescription drug coverage needs.
Most Medicare Advantage plans combine medical and Part D prescription drug coverage. Many also coordinate the delivery of added benefits, such as vision, dental, and hearing care. You may prefer the convenience of working with one plan administrator.
Types of Medicare Advantage (Part C) plans
It’s important to understand the differences between the types of Medicare Advantage plans to see which works best for you. There are several different types of Medicare Advantage plans:
- HMO (Health Maintenance Organization plan): Lets you see doctors and other health professionals who participate in its provider network. If your doctor is already in network, it could be a good option because you tend to pay less out-of-pocket with in-network doctors.
- PPO (Preferred Provider Organization plan): Covers both in- and out-of-network providers, giving you the freedom to choose any doctor that accepts Medicare assignment, which can work if you prefer that kind of flexibility.
- PFFS (Private Fee-for-Service plan): The plan determines how much it will pay providers and how much you must pay when you get care. The treating doctor has to accept the plan’s payment terms and agree to treat you. If the doctor doesn’t agree to those terms, then the PFFS plan will not cover services through that doctor.
- SNP (Special Needs Plans): Are especially for people who have certain special needs. The three different SNP plans cover Medicare beneficiaries living in institutions, those who are dual-eligible for Medicaid and Medicare, and those with chronic conditions such as diabetes, End Stage Renal Disease (ESRD), or HIV/AIDS. This type of plan always includes prescription drug coverage.
- HMO-POS (Health Maintenance Organization – Point of Service plan): Covers both in- and out-of-network health services, but at different rates. You pay less out-of-pocket when you go to in-network doctors, labs, hospitals, and other health care providers.
- MSA (Medical Savings Account plan): Includes both a high deductible and a bank account to help you pay that deductible. The amount deposited into the account varies from plan to plan. The money is tax-free as long as you use it on IRS-qualified medical expenses, which include the health plan’s deductible.
Eligibility For Medicare Advantage Plans
Medicare Advantage plan eligibility is based on your eligibility for Original Medicare, Part A and Part B (except if you have ESRD). Generally, if you have Medicare Part A and Part B, you are eligible for Medicare Part C. However, you must live in the service area for the Medicare Advantage plan that you’re considering.
If you have other health insurance coverage, for example through an employer or union, ask your plan administrator about that plan’s rules before you enroll in a Medicare Advantage plan. In some cases, you may lose your other coverage if you enroll in the Medicare Advantage plan and you may be unable to get it back if you change your mind later.
Enrollment in Medicare Advantage plans
You may only during specified election periods:
- Initial Coverage Election Period: You can enroll into a Medicare Advantage plan or Medicare Advantage Prescription Drug plan when you first become eligible for Medicare. Your Initial Coverage Election Period (ICEP), is a seven-month period that starts 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65. If you are under age 65 and you receive Social Security disability, you qualify for Medicare in the 25th month after you begin receiving your Social Security benefits. If you fall into this category, you may enroll into a Medicare Advantage plan 3 months before your month of eligibility, during the month of eligibility, and 3 months after the month of eligibility. For example, if your Medicare Part A and Part B coverage begins in May, your Medicare Advantage plan ICEP is February through August.
- The Annual Election Period (AEP), also called Open Enrollment Period for Medicare Advantage and Medicare prescription drug coverage, is October 15 through December 7 every year. The plan coverage you choose during the AEP begins on January 1 of the next year. It allows Medicare beneficiaries to add, change, or drop their current coverage. You can use this period to enroll into a Medicare Advantage or Medicare Prescription Drug Plan or switch plans. If you’re already enrolled into a Medicare plan, you can use this period to disenroll from your plan.
- Medicare Advantage Open Enrollment Period (OEP): If, after enrolling in a Medicare Advantage plan, you change your mind, you can switch back to Original Medicare from January 1 through March 31. If you would be losing prescription coverage as a result of the switch, you can also enroll into a stand-alone Medicare Part D Prescription Drug Plan during this time, if you wish.
- Special Election Period: Generally, once you enroll into a Medicare Advantage plan, you stay enrolled in the plan until the next Annual Election Period (AEP) opens. However, there are some life events that might qualify you for a Special Election Period (SEP) during other times of the year, so you can make a change to your Medicare Advantage coverage. Some examples of these life events include (but aren’t limited to):
- Moving outside your Medicare Advantage plan’s service area
- Qualifying for Extra Help (a program to help you pay for prescription drugs)
- Moving into an institution (such as a nursing home)
To see if the Advantage route is a good idea for you contact Senior Healthcare Advisors below - we have a trained & empathetic team ready to help you with all of your Advantage needs.