Medicare Advantage
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Medicare Advantage Plans Guide
Entering Medicare is often the starting point of your retirement years. The task facing you as you approach Medicare is to put a strategy together that will help you make the most of your Medicare coverage. Original Medicare, the basic program that almost every American qualifies for, provides very solid coverage at an affordable price. However, it does leave some substantial gaps in coverage. How you fill or close those gaps matters. For many people, Medicare Advantage plans offer an affordable way to build on your basic Medicare benefits and provide coverage for things left uncovered by Original Medicare.
How Does Medicare Advantage Work?
Medicare Advantage plans are authorized by Part C of the Medicare program. Part C was created in the 1990s as a way to allow Americans to use their Medicare benefits through a private insurance company. It is an optional program that you voluntarily enroll in. When you do this, you actually leave the Original Medicare program. As a participant in a Medicare Advantage plan, you agree to receive all of your rights and benefits under Parts A and B from your Part C plan. This is not a permanent election. You have the right to drop your Medicare Advantage plan at certain times of the year and return to Original Medicare.
Medicare Advantage plans are highly regulated, and must cover all benefits that are available under Parts A and B. In other words, you are not sacrificing any medical coverage when you enroll in Medicare Advantage. In fact, as we’ll see in a little while, Medicare Advantage plans often offer more benefits than you can get under Original Medicare.
Your Medicare Advantage plan will spell out fixed co-payments and co-insurance amounts for every service or procedure covered by Parts A and B of Medicare. Much more importantly than this though, your plan will provide an annual Out of Pocket Maximum (OOPM) spending cap. This will limit the amount you’ll pay out of pocket in any one year. This protection is not available from Original Medicare; your costs are potentially unlimited with Part A and B from Original Medicare. This is a huge benefit, and one of the prime reasons people choose Medicare Advantage coverage.
Extra Benefits From Medicare Advantage
Besides the basic Part A and B benefits, Medicare Advantage plans usually come with additional benefits; coverages you can’t get under Original Medicare. Every plan offers their own mix of extra benefits, but some common ones include:
- Prescription drug coverage that meets the Part D requirements – these kinds of plans are called Medicare Advantage Prescription Drug (MAPD) plans
- Emergency coverage outside the United States (Original Medicare generally doesn’t provide this)
- Vision, dental, and hearing coverage
- Gym memberships and active living programs
- Personal safety monitoring coverage
There are other extra benefits beyond these, too. The main point is that none of these services or coverages is available from Original Medicare. They’re generally also unavailable from Medicare Supplement Insurance, which makes Medicare Advantage plans some of the most comprehensive plans available.
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How Much Does Medicare Advantage Coverage Cost?
There are a few ways to look at the cost of Medicare Advantage plans, but in general, they’re considered to be affordable, especially when compared to Medicare Supplement Insurance.
It’s important to always keep in mind that even though Medicare Advantage is a separate program from Parts A and B, you must always continue paying your Part B premium when you have Part C coverage.
Besides your Part B premium, you might encounter these costs for Medicare Advantage plans:
- Monthly premiums for your Part C plan
- Annual medical deductible
- Annual Part D drug coverage deductible (if your plan covers Part D)
- Co-payments and co-insurance for medical services and procedures and/or prescription medication fills
Many Medicare Advantage plans do not impose an additional monthly premium (besides your Part B premium). For those plans that do charge a monthly premium, it is likely to be much lower than Medicare Supplement Insurance coverage.
There also Part C plans that don’t impose an annual deductible; you start the year paying co-payments and co-insurance. Deductibles are more likely to apply to the drug coverage provided by an MAPD plan, although it is possible for there to be separate deductibles for medical and drug coverage.
Once you’re through the deductible stage, if your plan has one, you will be responsible for paying various co-payments and co-insurance for both medical and drug coverage.
What Are My Medicare Advantage Plan Options?
Medicare Advantage plans come in several different forms. The two most common are PPO and HMO plans. Both of these plan types are common in under-65 insurance like you’d normally get from an employer.
HMO plans are generally much more restrictive. They have fixed networks of providers and you must stay within the network for the plan to cover your services and procedures. You’ll have to work with a Primary Care Physician (PCP), and you’ll need to receive referrals from your PCP to see specialists and have various tests performed. Although they are more restrictive, HMO plans generally have the lowest out of pocket costs among Medicare Advantage plans. They also usually have the lowest deductibles and out of pocket spending caps.
PPO plans are more flexible. They also have a network, but they also give you the freedom to see providers who are not in the network. When you go out of network, the plan will still provide coverage, but your share of the cost will be higher than if you’d stayed in the network. You also have the flexibility to go directly to specialists without relying on a referral from your PCP. PPO plans are often more expensive than their HMO counterparts in terms of monthly premiums, deductibles, and out of pocket maximums.
Am I Eligible For Medicare Advantage?
Medicare Advantage plans are available to everyone who is eligible for Parts A and B of Original Medicare. You must be actively enrolled in Part B in order to keep your Medicare Advantage coverage in place. There are no age or medical condition restrictions.
When Can I Enroll In Medicare Advantage?
You will have a chance to enroll in a Medicare Advantage plan when you first become eligible for Medicare. For most people, this happens when they turn 65 years old. However, if you decide to delay enrolling in Part B because you’re still working and covered by a qualifying employer plan, you’ll have a chance to enroll in Medicare Advantage whenever you retire and enter Part B.
If you become eligible for Medicare early because you’re permanently disabled, or are diagnosed with either End Stage Renal Disease (ESRD) or ALS (Lou Gehrig’s disease), you’ll have the opportunity to enroll in a Part C plan at that time.
Besides these initial enrollment periods, you can switch from one Medicare Advantage plan to another during the Annual Election Period (AEP) every fall. During the AEP, you can change plans as many times as you like; whichever plan you enrolled in last will become your new plan. Your new coverage will be effective on January 1st of the following year.
Another enrollment window is the Medicare Advantage Open Enrollment Period (MA-OEP), which runs from January 1st to March 31st. This enrollment window is for people who already have a Medicare Advantage plan. If you’re enrolled in Original Medicare and don’t currently have Medicare Advantage coverage, you’re only allowed to enroll in a Part C plan during AEP in the fall (October 15th to December 7th).
Special Enrollment Periods
One of the exceptions to the general enrollment rules is when you qualify for a Special Enrollment Period (SEP). These are triggered based on changes in your life circumstances. Some of the most common reasons for a Special Enrollment Period are:
- Moving from one country or state to another
- Losing your employer or retiree health insurance coverage
- Moving back to the United States after living abroad
- Your current Medicare Advantage plan losing its contract with Medicare or not renewing their contract
When you qualify for a Special Enrolment Period, you’ll have the opportunity to make changes to your Medicare coverage. You’ll have the chance to enroll in a Medicare Advantage plan, or switch from one to another. This is a one-time opportunity; once you’ve made one change, the SEP ends, so you’ll want to make sure that you make a sound decision. Of course, you will still have the right and option to make a further change during the Annual Election Period of MA-OEP.
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How Can Orlando Medicare Advisors Help Me?
Medicare Advantage plans can be a wonderful value for people on Medicare. This is not a set it and forget it program, though. It takes a lot of research and elbow grease to find the plan that will best fit your needs. For instance, you’ll need to look up all of your doctors, hospitals, and medications to make sure that the plan you’re interested in will work for you. Orlando Medicare Advisors can do this work for you. Not only that, but we can help you compare the benefits and costs for multiple plans, helping you find the one you like best. You can get started with a free consultation. Reach out to us today to get started finding the right Medicare Advantage plan for you.