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. Your Medicare services aren’t paid for by Original Medicare. 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 (SNP's)

 

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

Medicare Advantage Plans cover all Medicare services.  Some Medicare Advantage Plans also offer extra coverage, like vision, hearing and dental coverage. 

Medicare pays a fixed amount for your care each month to the companies offering Medicare Advantage Plans. 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 belong to the plan for non-emergency or non-urgent care.
• These rules can change each year.
   

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 priced generally by county so prices can vary quite a bit from city to city and state to state.

Most 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)

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.

 

Medigap policies can't work with Medicare Advantage Plans.

You can generally join one of these Medicare Advantage plans:

• Health Maintenance Organization (HMO) Plans
• Preferred Provider Organizations (PPO) Plans
• Private Fee for Service Plans (PFFS) Plans
• Special Needs Plans (SNP's)

If all of these apply:

• 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).

If you're already in a Medicare Advantage Plan and want to switch, follow these steps:

• To switch to a new Medicare Advantage Plan, simply 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 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 at plans at certain times of the year.

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

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 go back to Original Medicare, you need to decide if you want drug coverage. If so, you need to join a Medicare Prescription Drug Plan (Part D).

It’s important 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.

Some people get Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) automatically and other people have to sign up for it. 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.

Note: 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.

Generally, a Medicare Health Plan:

• Is offered by a private insurance company.
• 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)

Medicare Advantage Plans offer lower premiums but require you to use their own networks of Doctors and Hospitals, this enables them to lower their costs.
A Medicare HMO (Health Maintenance Organization) Usually require you only see 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 largest type of Medicare Advantage networks. HMO's 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 very common in the past, it has been slowly phased out in most areas. 

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

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

• 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.......  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 anything out of network except 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 certain 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

 

Medicare Advantage plans have lock-in periods. You can enroll in one during Initial Enrollment Period when you first turn 65. After that, you may enroll or dis-enroll only during certain times of 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 from 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 – 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 back 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.

Some people don’t realize this and join Medicare Advantage plans without the help of an agent. Therefore, they don’t know about all of these rules. Sometimes they find themselves enrolled into 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 that runs from January 1st – March 31st each year. During this time, you can disenroll from any Medicare Advantage plan and return to Original Medicare. You will be allowed to 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.

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 in the form of co-pays and coinsurance.
• Unlike Original Medicare, Medicare advantage plans have an out of pocket maximum cap 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.

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 or (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), and a Part D plan will provide prescription coverage. A Medicare Advantage plan wraps everything all 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 geographic areas of the country, meaning that not all of the plans or Plan Benefits are available everywhere.  

With MOOP expenses that range from $3,000 on up to $12,000 annually, the vast majority of Medicare Advantage plans simply cannot compare to Medigap plans, with respect to 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 Expense, which can be devastating to many Medicare beneficiaries. When comparing I encourage anyone leaning toward a Medicare Advantage plan to look at 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 and you have the freedom and flexibility to see any Doctor or go to any Hospital in the country who accepts Medicare.

 

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