Insurance For Over 65

Serving Georgia, Alabama, and Florida

Medicare Advantage

By

What’s the Advantage to Medicare Advantage Plans?


Nearly 22 million Americans currently receive their health benefits through a Medicare Advantage plan. There’s much to like about these plans, which provide extra services and make coverage more affordable than traditional Medicare by capping out-of-pocket costs.

It’s no surprise that a 2018 poll found a whopping 90 percent of people with Medicare Advantage plans are satisfied with their coverage.

But do you understand the ins and outs of Medicare Advantage? Read on for answers to some frequently asked questions to help find the coverage that’s right for you.

What is Medicare Advantage?

Medicare Advantage plans (also known as Medicare Part C) are offered by private health insurance providers that have been approved by Medicare. These companies receive government funding to cover your Medicare benefits and keep you healthy.

With traditional Medicare, the federal government pays your providers directly.

What do Medicare Advantage plans cover?

If you join a Medicare Advantage plan, that plan will provide all of your Medicare Part A (hospital insurance) and Medicare Part B (medical insurance) coverage. But that’s not all.

Medicare Advantage plans cover many things that traditional Medicare doesn’t cover. These extras can include vision, hearing and dental benefits, as well as wellness programs. Many Medicare Advantage plans give seniors access to affordable prescription drug plans, often at no additional cost.

And all Medicare Advantage plans limit the amount you must spend out of pocket for deductibles, copayments, and coinsurance each year for covered Medicare services.

Who is eligible to purchase a Medicare Advantage plan?

You must already be covered by Medicare Parts A and B to join a Medicare Advantage plan. You also must live in the Medicare Advantage plan’s service area.

Open Enrollment, which lasts from mid-October until early December, is when you can initially sign up, switch, or leave your Medicare Advantage plan. Beginning this year, you can also switch Medicare Advantage plans or from Medicare Advantage to traditional Medicare until March 31 if you change your mind.

Are all Medicare Advantage plans the same?

There are different options to meet different health and financial needs. Just as with individual or employer-sponsored insurance, several types of Medicare Advantage policies are available. The most common types of Medicare Advantage plans are:

  • Health Maintenance Organizations (HMOs)
  • Preferred Provider Organizations (PPOs)

You also may see Medicare Advantage plans called Private Fee-for-Service (PFFS) and Medical Savings Account (MSA) plans. If you are eligible for Medicaid, have a chronic condition, or live in a nursing home, you may also be able to sign up for another type of Medicare Advantage tailored to your specific needs called a Special Needs Plan (SNP).

While many Medicare Advantage plans are available at no additional cost, some charge premiums or have costs for optional services. Which providers are in the plan’s network also varies. That means it’s important to comparison-shop carefully, just as you do for other important expenditures. You’ll want to understand specific costs and benefits before you join.

Is a Medicare Advantage plan the same thing as a Medicare Supplement Insurance (Medigap) policy?

No. A Medigap policy is private insurance that helps supplement traditional Medicare. This means it helps pay some of the health care costs that traditional Medicare doesn’t cover (like copayments, coinsurance, and deductibles).

Greg Says encourages all Medicare eligible beneficiaries to consult with a licensed independent agent before making a decision about what Medicare plan is best for them. There are several variables to consider and there isn’t any one-size-fits all solution.

By

Medicare Advantage versus Medicare Supplement Plans:

I’m often asked, “What’s better, Medicare Advantage Plans or Medicare Supplement Plans?”  The answer is – “It Depends”.  There are a number of factors that must be considered before we can know which type of plan is best for you.

The first thing to do, however – is to get educated on how these two types of plans are fundamentally different:

A Medicare Supplement plan does what its name implies – it “supplements” Original Medicare Parts A and B.  Claims for your hospital and physician services are filed with Medicare.  The Medicare-approved portion of those claims that Medicare doesn’t pay, such as copays and your 20% co-insurance, are sent to your Medicare Supplement insurer to be paid for you according to the terms of your particular supplement plan.  This is why these plans are sometimes called Medigap plans – they cover the coverage gaps in Original Medicare.  For this supplemental coverage, you’ll pay a monthly premium which will increase as you get older.

A Medicare Advantage plan combines Medicare Parts A, B, and D (prescription drug coverage) under a single plan whereby all of your Medicare claims are sent directly to the insurer, not to Medicare.  The insurer will pay the Medicare-approved portion of those claims and you will be billed by the healthcare provider for any resulting copays and coinsurance.  In that respect, it’s just like Original Medicare except for the fact that your exposure to copays and coinsurance is limited to an annual maximum out-of-pocket limit which varies by the insurer (roughly between $6,000 and $7,000 per year).  Many of these Advantage plans are offered at a $0 monthly premium particularly in and around large metropolitan areas.  The insurers can afford to do this because Medicare pays them as much as $1,000 per month for each Medicare enrollee that they take on.

In my opinion, no Medicare enrollee should be without either a Medicare Advantage or Medicare Supplement plan.  Why?  Consider what your financial exposure would be if you only had Original Medicare Parts A, B, and D and you required heart surgery.  The American Heart Association says that the average cost of heart surgery in the US is $62,509.  In that case, the 20% Part B coinsurance alone would be over $12,500.  Add to this your copays and coinsurance associated with inpatient hospital services, related prescription drugs, and post-operative therapy and you could be left with tens of thousands of dollars in medical bills.

If you are within your Medicare Initial Enrollment Period (IEP, which is 3 months before to 3 months after your 65th birthday) and you have a chronic health condition such as cancer, COPD, rheumatoid arthritis, ulcerated colitis, or diabetes, I would suggest enrolling in a Medicare Supplement plan.  Likewise, if you’re within your IEP and you expect to need expensive surgery within the next 12-24 months, a Medicare Supplement plan is probably a good choice.

If you are relatively healthy and have a tight budget for healthcare expenses, you may be a good candidate for a Medicare Advantage plan.  Many of these plans are offered with $0 monthly premiums and include benefits that Medicare doesn’t offer such as partial coverage for dental, vision, and hearing services including the cost of hearing aids.

There are other considerations that enter into your decision to go with either a Medicare Supplement or a Medicare Advantage plan which can add complexity and confusion to your decision.  What you do can have a critical impact on your exposure to financial risk which is why you should seek the assistance of a licensed independent agent.