If you’re eligible for Medicare or soon will be, you may have heard of, and wondered about, Medicare Advantage plans.
What is a Medicare Advantage plan? Can you get one? Perhaps most importantly, should you – why might you want one of these plans?
We’ll try to answer all of these questions today and provide you with some peace of mind and helpful information about what your options are.
What is Medicare Advantage?
Medicare is a large and complex program, and it’s a good idea to read up on each of the various parts. For our purposes, here’s a very concise summary of the first two parts from the official Medicare website:
Medicare Part A is hospital insurance. It generally covers inpatient care in a hospital or skilled nursing facility, as well as hospice and home health care.
Medicare Part B is better described as medical insurance. It covers a variety of medical health and mental health services.
Together, Medicare Parts A & B are the two main parts of Original Medicare. There is also a Part D which covers prescription drugs.
Some people, however, choose not to get their Medicare Parts A & B benefits through Original Medicare, and instead opt to receive them through Medicare Part C… also known as Medicare Advantage.
Unlike Original Medicare, these plans are offered by private companies that contract with Medicare. The key stipulation that governs all of these plans is that they absolutely must provide at a minimum the same level of coverage provided by Original Medicare in Parts A & B.
So, if you don’t want to go the classic route, you can get a Part C plan that will effectively serve you as a combined A & B, but it will be provided by a private insurer contracting with Medicare as opposed to the original program itself.
You’re probably wondering, though, why you would want to do that. Are there any actual advantages, or are you better off sticking with the original program?
Let’s try to answer that question by considering a few important points.
You May Save Money
Since Medicare is not free and in fact has deductibles, copays, and coinsurance, you may want to look into ways to save money if you possibly can.
With a Medicare Advantage plan, you will still pay your Medicare Part B premium, and you may pay an additional premium – although some plans have additional premiums priced at zero.
Where you may start to see a benefit is in the form of better cost sharing. It could be the difference between a small copayment – say, $10.00 – for a primary care physician’s visit, and coinsurance of 20% for that same visit.
Another aspect of this is that unlike Original Medicare plans, Medicare Advantage plans limit your maximum out-of-pocket expense. Once you hit that maximum for the year, anything additional over that limit is no cost to you.
To be clear, this is the difference between potentially limitless expenses – at least in theory – and having a cap on how much you may have to spend in a year.
The ability to save money may be a very compelling reason to think about getting one of these plans as opposed to the originals.
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Your Plan Can Coordinate Care
Another feature of Medicare Advantage plans that you may find appealing is the ability to coordinate your care between multiple providers, which is a typical feature of these plans.
For example, one category of plans you can choose from are Health Maintenance Organization (HMO) plans. Under these plans, you select a primary care physician, and that person will help to coordinate your care.
It is also common for these plans to combine a variety of other benefits, including Part D prescription drug coverage, vision, dental, and even hearing care. If being able to handle all of these things with a single plan sounds appealing, an Advantage plan may be an option you’ll want to consider.
You Have Options to Choose From
There are different types of Medicare Advantage plans, the three most common of which are Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Private Fee-for-Service (PFFS). Let’s look briefly at each in turn.
HMOs are private plans paid by the federal government. You’ll need to have Medicare Parts A & B to join a HMO, and you will typically need to continue to pay your Part B premium.
You may or may not have to pay an additional premium, and your HMO may or may not pay part of your Part B premium. Most HMOs require you to remain within the network for non-emergency medical services.
PPOs are private companies paid by the federal government, and you will need Parts A & B to join one.
Generally, the rules are much like those of HMOs, with the notable exception that PPOs allow you to see any provider. You will generally pay more of the cost when you go out of network, and it is common to only have to make a fixed copay when you stay in-network.
PFFS are private companies paid by the federal government, like PPOs, and again you will need both A & B to join.
It is typical for these plans to have provider networks, and you may less in-network. However, all of these plans must also cover care outside of the network, though again you may pay a higher cost.
One additional benefit is the ability to request an advance organization determination, which asks your plan to determine that a service you plan to get is 1) medically necessary, and 2) eligible for coverage.
Is Medicare Advantage Right for You?
There’s no one right answer for everyone here. For a lot of people, these plans can save money and offer better value for the money they do spend. That said, we’ve seen one important limitation: many of these plans charge higher costs to go out of the network.
Some services may require referrals from doctors and authorizations from your plan. And, too, these plans typically have regional service areas, though some are more local.
Bottom line: we are here to help you select the plan that is right for you. And best of all, our advice and service is free, with no cost to you!