No aspect of the Medicare program gets such heart-felt reactions as Medicare Advantage. The incessant advertising that has cropped up in the last few years has only added fuel to the fire. Don’t let other people’s opinions of Medicare Advantage influence you. Instead, get the facts on the Medicare Advantage program by reading this guide, and learn how to decide if it’s a good option for you.
What Is The History Of The Medicare Advantage Program?
The Medicare Advantage program was created in 1996 as Part C of Original Medicare. You will sometimes see these plans referred to as Part C plans. The goal with this program was to give Americans the ability to use their Medicare benefits through a private insurance company in a way that would help them save money and receive more comprehensive care.
You might wonder why an improvement over Original Medicare was needed. While Original Medicare does provide solid benefits, there are several gaps in this coverage. The most noticeable gaps are:
- No out of pocket spending gap (your costs are potentially unlimited under Traditional Medicare)
- No routine or preventative dental, hearing, or vision coverage
- No prescription drug coverage
- No emergency coverage outside the United States
Medicare Advantage plans can fill in each of these gaps.
Despite the potential for providing more comprehensive coverage than Original Medicare, Part C started out pretty slow. Small, local and regional insurance companies launched Medicare Advantage plans. They were mostly an afterthought for a long time. However, as bigger insurance companies have entered the Medicare Advantage market, including the biggest in the nation like United Healthcare, Aetna, and Humana, the popularity of the program exploded.
How Do Medicare Advantage Plans Work?
Medicare Advantage plans work as a full-blown alternative to Traditional Medicare. When you enroll in a Part C plan, you’re actually withdrawn from Original Medicare. This means that when you see a doctor or other provider, you’ll give them your Medicare Advantage plan card; they will bill your Plan directly. Medicare is no longer involved in paying for your health care.
This isn’t a permanent choice, though. You keep the right to drop your Medicare Advantage coverage and return to Original Medicare; you can do this during either of the standard elections periods during the year.
Besides this protection, you should also know that every service and procedure that’s covered by Original Medicare, Parts A and B, is also covered by every Medicare Advantage plan in the country. It’s a requirement of the law.
Medicare Advantage does work a little differently than Traditional Medicare in the way that you pay. Under Original Medicare, Medicare pays most of the cost for your services, and you pay the rest. For Part B services like doctor’s appointments, you typically pay 20% of the cost. With Medicare Advantage plans, on the other hand, you’re much more likely to pay fixed co-payments for the services you receive. So, instead of paying a floating 20% of the Medicare-approved cost, you might pay a fixed $30 co-payment to see your Primary Care Physician. You will pay these co-payments throughout the year. If you have a lot of major health care services, and you hit your out of pocket maximum (OOPM), you’ll stop paying for medical care. Your plan will pay the rest of your medical costs for the rest of the year.
Medicare Advantage Plans And Extra Benefits
Some of the most popular features of Medicare Advantage plans are the Extra Benefits. These are benefits offered by the plan that are not available from Original Medicare. These extras come in different forms and fall into different categories. Some of the most common among plans include:
- Dental coverage (both routine and comprehensive)
- Routine vision (exams, and help with lenses and frames)
- Routine hearing (exams, and help with hearing aids and batteries)
- Gym membership programs / fitness programs
- Transportation to and from medical appointments
- Healthy food allowances
- Personal safety monitoring
There are other extra benefits available, too, like home-delivered meals for people coming home after hospitalization. In all cases, these are services that are not covered by Original Medicare, which means that if you were on Original Medicare (even with a Medigap plan), you would have to pay cash for these. Or, purchase standalone coverage, which adds to your monthly premiums costs.
The extra benefits available from Medicare Advantage plans can be a real difference maker for those people who can’t afford Medicare Supplement premiums or individual dental, vision, and hearing coverage.
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What Are The Eligibility Requirements For Medicare Advantage Plans?
Medicare Advantage plans have the exact same eligibility requirements as Original Medicare. In fact, to be eligible for Medicare Advantage, you must first be eligible for Original Medicare. Generally speaking, you’ll have a chance to enroll in Medicare when you turn 65 and enter Part A and B. When you enter Medicare in this manner, you’ll have a seven month window to get your coverage, and it spans the three months before you turn 65, the month that you turn 65, and the three months after your 65th birthday. You can enroll and enter Medicare at any time during this window. If you do, you can also enroll in the Medicare Advantage plan of your choice.
Since Social Security Retirement’s Full Retirement Age is now 66 and later, many people choose to work past age 65. If you do that, in most cases you can stay on your employer coverage (or your spouse’s employer coverage, if applicable. Whenever you retire or lose your employer coverage, you’ll have a special eight-month window of time to enroll in Medicare and Medicare Advantage.
Some people can get Medicare, and Medicare Advantage, coverage before age 65. If you qualify for Part A and B early because of illness or disability, you’ll have the chance to enroll in a Medicare Advantage plan when your Part A and B coverage starts.
The most important thing to keep in mind about the relationship between Medicare and Medicare Advantage is that you must always continue to pay your Part B premium, even if you have Medicare Advantage.
In addition to when you first become eligible for Medicare, you’ll have an opportunity to enroll in a Medicare Advantage plan, or change from one to another, at least once per year. You can do this during the Annual Election Period (AEP), which runs from October 15th to December 7th of every year. If you already have Medicare Advantage plan coverage, you’ll be able to make changes to your coverage during the Medicare Advantage Open Enrollment Period, which occurs from January 1 to March 31 of every year.
What Types Of Medicare Advantage Plans Are Available?
While there are several different kinds of Medicare Advantage plan, there are two main types that are very widely used:
- Health Maintenance Organizations (HMO)
- Preferred Provider Organizations (PPO)
Both of these kinds of Medicare Advantage plans utilize networks of providers and facilities. This means that a provider like a doctor, or a facility like a hospital, have a contractual relationship with the plan. They have agreed to accept certain amounts as payment for all the services and procedures they provide. The plan pays most of the cost. You pay some, usually in the form of a fixed co-payment.
The difference between PPO and HMO mostly comes down to how strict the network requirements are. An HMO plan usually requires that you always and only use network providers. If you go out of network, the plan won’t pay. You’ll pay full price.
A PPO plan will allow you to go out of network. However, you’ll pay the lowest possible prices if you use the network of preferred providers. PPOs have more freedom when it comes to provider choice.
Another difference is that an HMO plan will almost always require you to get a referral from your Primary Care Physician to see a specialist. PPOs tend to let you see specialists without a referral.
As you can imagine, in exchange for the restrictiveness of HMOs, you’ll usually pay lower premiums and co-payments. The more flexible PPO plans usually have higher premiums and higher cost-sharing amounts.
How Do I Know If Medicare Advantage Is Right For Me?
This is the key decision you’ll make as you enter Medicare for the first time, but it’s also a choice you can end up making years down the road, too, if you end up going with Medicare Supplement Insurance initially. It’s an important choice, so we’ll give you a few suggestions on when Medicare Advantage is a good fit. You could be a good candidate for Medicare Advantage if:
- You don’t mind paying co-payments or co-insurance for the services and procedures you require
- You want or need the extra benefits that are included with Medicare Advantage plans
- You can’t afford the premiums for a Medicare Supplement plan
- You’re not too interested in being able to see any provider anywhere in the country; you don’t mind working within a network
There are many other factors to consider of course, but these suggestions can help you decide if you should consider Medicare Advantage.
When it comes to choosing a particular plan, there’s more work to be done. You want to make sure that your plan is accepted by all the doctors you see and that your medications are covered, too. Tampa Medicare Advisors can help take this work off of your shoulders. We can look up your medications and doctors and find the plans that best fit your needs. We can even help you compare quotes from multiple plans. To put Tampa Medicare Advisors to work for you today, schedule your free consultation.
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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