Medicare
Advantage

Although Original Medicare has helped make health insurance and health care more affordable for seniors and the permanently disabled, it is not a perfect program. Parts A and B have a significant number of gaps in their coverage, which has led to the search for insurance coverages that help close them. The two main programs available to help with the holes in Original Medicare are Medicare Supplement Insurance and Medicare Advantage. This article will review the basics of Medicare Advantage plans and some of the program’s details.

What is Medicare Advantage?

Medicare Advantage is also known as Part C of Original Medicare. For this reason, you will sometimes see these plans called Part C Plans. However you refer to them, they are a private alternative to Original Medicare. They are “private” because private insurance companies offer and administer these plans. Medicare Advantage is not a government program. When you enroll in a Medicare Advantage Plan, you elect to receive your Part A and B benefits through your private insurance company.

When considering Medicare Advantage, it is essential to understand that these plans must cover every service and treatment that Original Medicare covers. In other words, you are guaranteed to receive coverage that is at least as good as Original Medicare in terms of the coverage of specific medical services or procedures. If Original Medicare covers something, every Medicare Advantage plan also covers it (technically, Medicare Advantage plans don’t have to cover hospice treatment, but hospice care is still available under Part A, even if you’re in a Medicare Advantage plan). There may be differences in how much you pay, which providers you use, and when you use them, but the actual coverage will be identical to Original Medicare.

How does Medicare Advantage close the gaps of Original Medicare?

We said earlier that People frequently choose medicare Advantage plans to help close the gaps in Medicare – those out-of-pocket costs that you’d normally have to pay if you stayed on Original Medicare. Medicare Advantage helps by closing these gaps in coverage:

Part A deductible
Part B deductible
Out of Pocket Maximum protection
Prescription Drug coverage (optional)
Ancillary benefits like dental, vision, and hearing (optional)
Emergency foreign travel (some plans)

Now it’s essential to understand how Medicare Advantage plans cover these gaps because “coverage” doesn’t mean that you don’t have an out-of-pocket expense. We’ll review how Part C plans work in the next section, but for now, we’ll focus on the Out of Pocket Maximum (OOPM) feature and some of the extra benefits that Medicare Advantage plans come with.

Of all the gaps in Original Medicare, probably the most worrisome to people is the lack of a cap on your spending. Your out-of-pocket costs with Part A and B are potentially unlimited. Unlike with other types of health insurance, there is no limit on your spending. Since you’ll be paying 20% of the cost of Part B services and procedures, your costs can add up if you have a severe illness like cancer. With Medicare Advantage, you don’t have to worry about this. Every Medicare Advantage plan is required to provide an out-of-pocket spending cap. If you hit that level during the year, your plan will pay 100% of any other Medicare-covered costs for the rest of the year. This feature can bring you peace of mind, knowing that you won’t be exposed to financial ruin in any given year.

Besides the out-of-pocket spending cap, Medicare Advantage plans frequently cover services and procedures that Original Medicare does not cover. The most important of these is prescription drug coverage. Many Medicare Advantage plans provide Part D drug benefits. These plans are known as Medicare Advantage Prescription Drug Plans (MAPDs). This is a precious benefit because the cost of prescriptions can be very high. Obtaining drug coverage through a standalone Part D Prescription Drug Plan can also come with a high premium. The drug benefits provided by a Medicare Advantage plan are identical to a standalone drug plan.

Part C plans can come with many other extra benefits, including:

Dental
Vision
Hearing
Emergency foreign travel

It’s important to understand that Medicare Advantage plans aren’t required to offer these benefits, but many of them do.

Dental Coverage

It used to be that dental was only available for an extra monthly premium. However, insurance companies are increasingly offering some built-in dental coverage.

Vision Coverage

Another benefit not available from Original Medicare is that vision benefits are among the most popular among Medicare Advantage enrollees. Medicare Advantage plans often cover routine vision exams and at least partial coverage of lenses and frames.

Hearing Coverage

Medicare Advantage plans frequently cover routine hearing exams. Most companies also negotiate reduced prices on hearing aids with hearing technology companies. This allows their members to purchase hearing aids on a more affordable basis compared to buying them on their own.

Health Benefits

These are among the more popular Medicare Advantage plan benefits. These usually allow you to work out for low or no cost at local gyms. They often also come with web-based fitness classes as well.

Extra Benefits

There are many other kinds of extra benefits. Often plans will provide transportation benefits, emergency response devices, monitoring, or other benefits designed to help you stay healthy.

Emergency Travel

This one is a little less common among Medicare Advantage plans, but it is available from many. This is a vast improvement, if public, since Original Medicare provides no coverage outside the United States, except in infrequent circumstances.

How do Medicare Advantage Plans Work?

The most important thing to remember is that you have to stay actively enrolled in Medicare Part B to join a Medicare Advantage plan. This means you must keep paying your Part B premium unless you qualify for assistance from your state, in which case your state will pay the premium.

You will find that Medicare Advantage plans function similarly to traditional group or individual health insurance plans. You can expect to encounter these types of expenses:

Monthly premiums (beyond Part B)
Deductibles
Co-payments or co-insurance amounts

Many plans don’t have an annual deductible or a monthly premium. When you go to the doctor or have other services and procedures, you’ll usually have to pay a co-payment, which is just like most other kinds of health insurance you’re used to. Similar to different types of health insurance, most Medicare Advantage plans are either HMO or PPO based.

HMO

Health Maintenance Organizations

HMOs, require you to use a fixed network of doctors and providers. If you use a provider, not in the network, it’s usually not covered, and you’ll have to pay the total price out of pocket. HMOs usually also require you to get a referral from your Primary Care Physician (PCP) to see a specialist. In exchange for these kinds of restrictions, you usually get the lowest costs available in terms of co-payments and out-of-pocket maximums with HMOs.

PPO

Preferred Provider Organizations

PPOs also have a network of providers, but unlike HMOs, there is no requirement that you use them. However, you will generally pay the least if you use the PPO plan’s providers. Out-of-network co-pays, co-insurance, and out-of-pocket limits are all typically higher when you’re out of network. However, with a PPO, your plan will help pay for services and procedures when you’re out of network, which many people value. You also probably won’t need a referral to see a specialist.

There are many other Medicare Advantage plans, but they’re pretty rare. The most common “other kind” of Medicare Advantage plan is a Private Fee For Service Plan (PFFS). With this type of plan, you avoid fixed networks, but every provider you see can choose to accept the plan or reject it, making it hard to know where you stand with your provider. However, if your provider does accept the terms of the plan, you can find that your co-payments and co-insurance are pretty low.

Who is Eligible for Medicare Advantage?

The great thing about Medicare Advantage plans is that the eligibility rules are straightforward. If you’re eligible for and enrolled in Parts A and B of Original Medicare, you can enroll in a Medicare Advantage plan. There are no exclusions. This is different from Medicare Supplement Insurance, which often excludes people younger than 65. This makes Medicare Advantage an excellent coverage for people who enter Medicare early due to disability or illness. You have several options for enrolling in a Medicare Advantage plan. You can generally enroll in one:

During your initial Medicare enrollment period when you first become eligible
During the Medicare Annual Election Period (AEP) from October 15th to December 7th of every year
During a Special Enrollment Period (SEP), if you qualify for one due to a change in your life circumstances

Once you’re enrolled in a Medicare Advantage plan, you’ll have a few opportunities to change your coverage up if need be. When you have Part C coverage, you can switch plans during:

Annual Election Period (AEP) each year
During the Medicare Advantage Open Enrollment Period (MA-OEP) from January 1st to March 31st of each year (only available if you already have a Medicare Advantage plan)
During a Special Enrollment Period, if you qualify for one.

When considering a Medicare Advantage plan, it is essential to make sure that any doctors you care about accept the plan (make sure they are in-network). It’s also critical to make sure that the plan covers your medications. If these tasks are neglected, the odds are very high that you will not like your coverage and have a poor experience with it. One of the best ways to make sure a Medicare Advantage plan is a good fit is to work with an independent insurance agent. A licensed agent can compare plans in your area and make sure your doctors accept the plan of your choice. To compare plans in your area today, contact San Antonio Medicare Advisors and request your free, no-obligation consultation.

Medicare Advantage