Medicare Advantage Plans – Medicare health plans offer an alternative to Original Medicare for receiving Part A (hospital insurance) and Part B (medical insurance) benefits.
However, these plans, such as Medicare Advantage Plans (Part C), are provided by Medicare-approved private companies adhering to Medicare regulations.
Most Medicare beneficiaries in a state, or limited to specific counties, are determined by insurance companies. Additionally, insurance companies may present multiple plans in an area, each with distinct benefits and costs.
If a plan chooses to discontinue its involvement with Medicare, individuals must either enroll in another Medicare health plan or revert to original Medicare.
What Are Medicare Advantage Plans?
Medicare Advantage (MA) is a healthcare option provided by private insurers through a contract with the Medicare program.
However, it’s commonly known as Medicare Part C as it offers comprehensive coverage, encompassing hospital, outpatient, and often prescription drug benefits. And effectively replacing the services provided by Medicare Parts A, B, and D.
Also, individuals opting for the MA plan retain their Medicare coverage and are obligated to continue paying Medicare Part B premiums.
In addition, compared to traditional Medicare, Medicare Advantage plans typically involve lower out-of-pocket expenses and may include extra benefits.
However, members are typically required to seek care from network providers and obtain referrals to consult with specialists.
How Does Medicare Advantage Work?
Medicare eligibility generally extends to individuals aged 65 or older, those with disabilities, and individuals with specific medical conditions. Moreover, these conditions are like end-stage renal disease or amyotrophic lateral sclerosis (ALS).
However, Medicare Advantage plans, approved by Medicare and offered by private companies, serve as an alternative to traditional Medicare coverage.
These plans cover hospital and outpatient services, replacing Parts A and B of Medicare, excluding hospice care. Additionally, most Medicare Advantage plans incorporate Part D prescription drug coverage.
Certain Medicare Advantage plans go beyond traditional Medicare by covering expenses like vision, dental, and hearing-related costs.
Also, it’s important to note that Medicare Advantage plans do not work in conjunction with Medigap, also known as Medicare Supplement Insurance.
The average monthly premium for Medicare Advantage in 2024 is $18.50. Participants pay this in addition to the monthly Medicare Part B premium, set at $174.70 in 2024.
Types of Medicare Advantage Plans
There are various types of Medicare Advantage Plans.
Health Maintenance Organization Plans
Typically, within Health Maintenance Organizations (HMOs), your healthcare options are restricted to providers and facilities within the plan’s network, except in urgent or emergencies.
Additionally, it’s common to require a referral from your primary care doctor for tests or consultations with other healthcare professionals or specialists.
Preferred Provider Organization Plans
In a Preferred Provider Organization (PPO), the cost to you is generally lower when you opt for doctors, hospitals, and healthcare providers within the plan’s network. Conversely, using services outside of the network typically results in higher out-of-pocket expenses.
Private Fee For Service Plans
Private Fee-For-Service (PFFS) plans share similarities with Original Medicare, allowing you the flexibility to visit any doctor, healthcare provider, or hospital that agrees to the plan’s payment terms.
However, it sets the payment terms, determining the amount it will cover for services provided by doctors, healthcare professionals, and hospitals.
Your financial responsibility is contingent on the plan’s payment terms, specifying both the plan’s contribution and your out-of-pocket costs when receiving care.
Special Needs Plans
Special Needs Plans (SNPs) offer targeted and specialized healthcare tailored for particular groups of individuals. Additionally, this includes those who are eligible for both Medicare and Medicaid, reside in nursing homes, or have chronic medical conditions. SNPs aim to address the unique needs and requirements of these specific populations.
HMO Point Of Service Plans
These refer to HMO plans that might offer the option to receive certain services from out-of-network providers, albeit at a higher copayment or coinsurance.
Medical Savings Account Plans
These plans merge a high-deductible health plan with a designated bank account. Medicare deposits funds into this account, typically an amount less than the deductible.
Throughout the year, you can utilize these funds to cover your healthcare expenses. It’s important to note that Medical Savings Account (MSA) plans do not include Medicare drug coverage.
Who Can Join A Medicare Advantage Plan?
To be eligible to enroll in a Medicare Advantage Plan, individuals must have both Medicare Parts A and B. And also reside in the plan’s designated service area.
However, individuals with end-stage renal disease (permanent kidney failure) typically face restrictions and may not be able to join a Medicare Advantage Plan.
How Much Does Medicare Advantage Plans Cost?
Apart from your Part B premium, there is typically a single monthly premium for the services provided by a Medicare Advantage Plan. The specific premiums and costs for services vary among different Medicare Advantage Plans.
Therefore, it is crucial to compare plans within your area and thoroughly comprehend the associated costs and benefits before deciding to enroll.
What Do Medicare Advantage Plans Cover?
Medicare Advantage Plans are mandated to provide coverage for all the services offered by Original Medicare. Besides being in a Medicare Advantage Plan, Original Medicare continues to cover hospice care.
Emergency and urgent care are consistently covered in all types of plans it offers. Additionally, benefits like dental care, eyeglasses, or wellness programs are often included in many Medicare Advantage Plans.
Furthermore, most Medicare Advantage plans incorporate Medicare prescription drug coverage (Part D). In addition to the Part B premium, participants usually pay a monthly premium for the plan’s medical and prescription drug coverage.
It’s important to note that plan benefits may change annually, so it’s essential to thoroughly understand how a plan operates before enrollment.
Advantages And Disadvantages Of Medicare Advantage Plans
Medicare Advantage plans come with both advantages and disadvantages. While they are a perfect fit for certain individuals, they may not be the optimal choice for everyone.
Advantages of Medicare Advantage Plans
Medicare Advantage plans might encompass additional benefits, such as coverage for hearing, dental, and vision services, which are not included in Original Medicare.
Lower Monthly Premium
Numerous Medicare Advantage plans do not require monthly premiums, and the associated out-of-pocket costs may be more affordable compared to original Medicare.
There are potential limits on the out-of-pocket expenses you might incur for hospital and medical coverage. However, these limits set by the Centers for Medicare and Medicaid Services could reach a maximum of $8,300–$8,850.
Medicare Advantage plans typically have prescription drug coverage included as part of their plan for some individuals.
Lastly, obtaining your hospital, medical, and drug benefits through a single insurance company. Medicare Advantage can provide a more streamlined experience compared to the structure of Original Medicare.
Disadvantages Of Medicare Advantage Plans
Medicare Advantage comes with limitations on your choice of medical providers, as you are typically required to use healthcare professionals within your plan’s network.
Many Medicare Advantage plans mandate that you both reside in and receive your non-emergency medical care within the plan’s designated geographic service area.
For those with Medicare Advantage, there could be restrictions on switching back to Original Medicare with a Medicare Supplement Insurance (Medigap) policy.
In Medicare Advantage plans, you may be required to obtain a referral from your primary care physician each time you seek the services of a specialist, which differs from the flexibility provided by Original Medicare.
Potential For Instability
There is a possibility that your Medicare Advantage plan might terminate its coverage, either initiated by the insurer or the network, including its associated medical providers. In such cases, you would receive notification and be presented with alternative options.
Approval from your Medicare Advantage plan might be necessary for specific tests or procedures, potentially causing delays in receiving care.
How To Shop For The Best Medicare Advantage Plans
Choosing the appropriate Medicare Advantage plan is contingent upon various factors, such as your health history, prescription medications, and location.
Here are some steps to assist you in selecting the best Medicare Advantage plan:
Check Your Star Rate
The Centers for Medicare & Medicaid Services (CMS) gather information on Medicare Advantage plans through surveys from members, input from the plans, and data from healthcare providers.
Subsequently, it assigns a star rating, ranging from 1 to 5, with 5 representing the highest performance.
Every plan includes a monthly premium, with numerous Medicare Advantage plans offering a premium-free option. Additionally, each plan specifies a maximum out-of-pocket cost, representing the highest amount you would pay in a given year for covered healthcare expenses.
Consider Your Medications
While it might be easy to overlook, it’s crucial to thoroughly examine how each plan addresses your medications, including whether they are covered and the extent of coverage provided.
Request For Doctors
If you have a roster of preferred caregivers and medical facilities, it’s advisable to search for plans that encompass these specific providers to ensure a seamless match with your healthcare preferences.
A PPO plan is likely to be more suitable if you regularly consult with specialists and prefer not to obtain a referral for each office visit.
On the other hand, if you typically engage with your primary care physician and have minimal healthcare needs, an HMO might offer a more cost-effective option.
To effectively compare Medicare Advantage plans, it’s essential to assess your healthcare requirements and consider the features of each plan.
How To Apply For A Medicare Advantage Plan
After conducting thorough research and identifying a Medicare Advantage plan that aligns with your needs, you can enroll through various methods, as outlined on Medicare.gov:
- Discover the Medicare Advantage plan available in your area and utilize Medicare’s plan-finding tool by entering your ZIP code.
- Visit the plan’s official website and explore the online enrollment option.
- Get in touch with the plan to request an enrollment form, complete it, and return it as instructed.
- Contact the plan directly and enroll over the phone.
- Alternatively, call Medicare at 800-MEDICARE (800-633-4227) for assistance with the enrollment process.
Before purchasing a Medicare Advantage plan, ensure you have your Medicare number and the date when your Medicare Part A and/or Part B coverage commenced. It’s imperative to be enrolled in Medicare Parts A and B before you can proceed with obtaining a Medicare Advantage plan.
In addition, enrollment in a Medicare Advantage plan is limited to your initial enrollment period. However, when you first become eligible for Medicare, the enrollment period opens from Oct. 15 to Dec. 7.
Also, if you already have a Medicare Advantage plan, you have the option to change plans during Medicare’s general open enrollment.