The popularity of Medicare Advantage plans is growing at a rapid pace. In 2020, more than 36% of all Medicare beneficiaries were enrolled in Medicare Advantage health care plans.
Whether you’re already in a Medicare Advantage plan, you’re curious about them, or you’ve never heard of them, this Medicare Advantage guide is for you. In this in-depth Medicare Advantage guide, we’ll provide a Medicare Advantage overview that will answer your frequently asked Medicare questions and cover the following topics:
Medicare Advantage, also known as Medicare Part C, is an alternative to Original Medicare. The Medicare Advantage program is a way for beneficiaries to access their benefits and rights under Original Medicare, but through a private insurance company instead of the Federal Government.
A Medicare Advantage plan is a contract between a private insurance company and the Medicare program. By law, every Medicare Advantage plan must cover everything covered by Original Medicare (Medicare Part A and Medicare Part B). This means that if you choose to enroll in a Medicare Advantage plan, you can be confident that you’ll receive all the benefits you’re entitled to under Original Medicare.
To qualify for Medicare Advantage, you must be enrolled in Original Medicare Parts A and B. You also must continue to pay your Part B premium in order to keep your Medicare Advantage coverage.
There are no age restrictions for Medicare Advantage plans. If you’re enrolled in Part A and B before age 65 due to a disability or chronic condition, you’re still eligible for Medicare Advantage coverage.
Medicare Advantage health care plans work like the employer-sponsored health insurance plans you may be used to from your previous or current job.
Medicare Advantage plans provide comprehensive coverage, and you usually need to stay in-network to receive care. You’ll typically have some out-of-pocket expenses when you receive services and procedures under your Medicare Advantage policy. These costs typically come in the form of copayments or coinsurance that you’ll pay to your provider when you receive care.
An important point to remember is that all Medicare Advantage plans have an annual out-of-pocket (OOP) maximum that limits the total amount you can spend in any year. But you do not have an OOP with Original Medicare.
There are 6 types of Medicare Advantage plans, including:
In this Medicare Advantage guide, we’ll focus on Medicare Advantage PPO plans and Medicare Advantage HMO since they’re the most common types of MA plans.
The primary difference between these programs is that Medicare Advantage is an alternative to Original Medicare. When you join a Medicare Part C plan, you no longer receive your Medicare benefits through Original Medicare.
Medicare Advantage plans are offered and administered by private insurance companies. But these private insurance companies must comply with many rules and regulations set by the Medicare program.
Medicare Part C plans have many advantages when compared to Original Medicare.
The 3 biggest pros of Medicare Advantage plans are:
*Note: Some MA plans are available without prescription drugs.
These additional benefits from Part C make Medicare Advantage a more complete coverage option than Original Medicare. MA plans can have their drawbacks in comparison to Original Medicare, depending on your healthcare needs.
The 3 biggest pros of Original Medicare are:
Medicare Advantage plans provide coverage that matches Original Medicare Parts A and B. Generally speaking, your Medicare Advantage plan will cover the same service or procedure as Original Medicare. But there is one exception to this rule, which we’ll cover below.
Medicare Advantage plans cover the following services.
Medicare Part A covers services that take place in healthcare facilities or institutions like:
Note: Hospice care is usually not covered by Medicare Advantage plans. Instead, hospice care is covered under Original Medicare, even if you’re enrolled in a Medicare Advantage plan. However, a new test program in 2021 will explore Medicare Advantage plans providing hospice benefits.
Medicare Part B services and procedures are considered more routine and non-emergency in nature than Part A. Common Medicare Part B services include:
As mentioned, Medicare Advantage plans cover all of these services with the exception of hospice care.
Most Medicare Advantage plans offer prescription drug coverage. These plans are also known as Medicare Advantage Prescription Drug Plans (MAPDs), and they include Medicare Part D.
When considering Medicare Advantage pros and cons, it’s essential to take extra benefits that Medicare Advantage could offer to you. Many of these benefits are not provided through Original Medicare.
Medicare Advantage benefits may include:
Note: Medicare Part C plans have the ability to choose which, if any, extra benefits to offer. These insurance companies may also make changes to their Medicare benefits and offerings each year.
You should consider enrolling in Medicare Advantage if:
Medicare Advantage plans have several costs associated with them. Before we dive into each cost, it’s important to remember that you always have to pay your Part B premium in order to have Medicare Advantage.
Now, some Medicare Advantage plans offer a benefit that covers part, or all, of your Part B premium. But check the plan benefits closely to see if this is offered by a specific Medicare Advantage plan.
Beyond this Part B premium, you might face the following Medicare Advantage plan costs:
You might have a monthly premium for your Medicare Advantage plan, but these premiums tend to be low. For example, the average Medicare Advantage premium was $23.63 per month in 2020. However, many Medicare Advantage plans do not have a monthly premium. In 2020, 60% of people enrolled in Medicare Advantage didn’t pay a monthly premium.
Some Medicare Part C plans have an annual deductible, but again, many do not. If your plan does have an annual deductible, this means you’ll have to pay a certain amount before the plan begins paying benefits. Note that there may be separate deductibles for drug coverage and medical benefits.
Beyond premiums and deductibles, the most common expenses you’ll have with Medicare Advantage plans are copayments and coinsurance. These two terms are referred to as “cost-sharing.” This is what you’ll pay out of pocket when you receive covered services. All the amounts you pay during the year count towards your annual out-of-pocket cap.
Let’s look at 3 examples of how these Medicare Advantage costs work in a Medicare Advantage HMO plan.
(Note: These costs are not the actual costs for any specific plan, but rather, in the range of costs for plans that you may have access to.)
Scenario 1: Medicare Part B Services
You injure yourself shoveling snow on your property, and you go to the doctor for an examination.
Scenario 2: Medicare Part A & B Services
You experience the symptoms of an irregular heartbeat, so you’re admitted to the hospital as an inpatient. You spend two nights in the hospital.
Scenario 3: Cancer
You’re diagnosed with a treatable cancer, and you’re given chemotherapy.
You can normally enroll in or change your Medicare Advantage coverage during 3 periods of time:
If you’re turning 65, you can enroll in Medicare Advantage during your Initial Enrollment Period (IEP). Your IEP lasts for 7 months, which begins 3 months before your 65th birthday, includes that birthday month, and ends 3 months after you turn 65.
If you’re under 65, your first chance to enroll in Medicare Advantage starts:
The Medicare Open Enrollment Period, also called the Medicare Annual Enrollment Period or Annual Election Period, is a good time to decide whether Medicare Advantage or Original Medicare is right for you.
Also keep in mind that Medicare Advantage plan benefits can change annually. So if you have a MA plan, you should check to make sure the plan still meets your needs.
Here are the actions you can take during AEP:
If you enroll in, or switch your Medicare Advantage insurance during AEP, your new coverage will be effective on January 1st of the following year.
You may also be able to enroll in a Medicare Supplement plan if you drop your Medicare Advantage coverage during AEP.
If you’re enrolled in a Medicare Advantage plan, you have access to another enrollment period beyond AEP: The Medicare Advantage Open Enrollment Period (MA-OEP).
MA-OEP runs from January 1 to March 31 of each year. During the MA-OEP, you can:
It’s important to keep in mind that the MA-OEP is only for people who already have a Medicare Advantage plan. If you change plans during the MA-OEP, your new coverage will be effective on the first day of the month after you enroll.
For all years before 2021, there was an exclusion for people with permanent kidney failure, known as End-Stage Renal Disease (ESRD). ESRD patients could not get new Medicare Advantage coverage.
However, beginning January 1, 2021, ESRD patients will be able to enroll in or switch Medicare Advantage plans. Now the eligibility for Medicare Advantage and Original Medicare will be perfectly aligned.
We mentioned earlier that Special Needs Plans (SNPs) are a type of Medicare Advantage insurance. Let’s take a look at some common types of SNPs, and how Medicare Advantage health plans are also helping people to get access to care and benefits during the coronavirus pandemic.
There are Medicare Advantage plan options for people with chronic conditions like diabetes and heart disease. These plans are known as Chronic Special Needs Plans (Medicare C-SNPs), and the benefits are tailored to help you treat and manage your chronic condition.
These health plans often provide you with a care coordinator to make sure your needs are being met. These Special Needs Plans have Special Enrollment Periods (often called SEPs), so if you qualify for a C-SNP, you can enroll in it at any time. You won’t have to wait for an annual enrollment window.
Another kind of Special Needs Plan exists for “Dual Eligibles” – people who are eligible for both Medicare and Medicaid. These plans, called Dual Eligible Special Needs Plans (D-SNPs), have cost-sharing that conforms to the Medicaid program, which means that most costs are $0.
D-SNPs incorporate various prescription drug discount programs, depending on your income level - so you’ll save money on your prescriptions if you qualify. D-SNP plans also have more favorable enrollment windows, which allow you to access the benefits once you become eligible for Medicaid or extra help and at certain times during the year without waiting for an annual enrollment window.
Medicare provides Coronavirus coverage to help people combat the virus, which includes:
Many Medicare Advantage health plans are waiving cost-sharing for these services. In this case, you wouldn’t pay a copayment or coinsurance for seeing a doctor or going to the hospital if you have COVID-19.
Medicare has also approved an expanded role for telehealth and virtual doctor’s visits. And many Medicare Advantage health care plans offer these no-contact services with no out-of-pocket cost to you.
Every established Medicare Advantage plan is given a Medicare Start Rating by the Centers for Medicare & Medicaid Services (CMS).
Star ratings range from 1 to 5, with 5 stars being the highest. Here’s a breakdown of what each rating means:
Medicare Advantage plans are rated on several different metrics and are given an overall rating. This Medicare star ratings system is designed to help you get a feel for the level of quality and satisfaction a MA plan offers.
Star ratings also give you an idea of how well a plan treats its members. Plans are rated on how quickly it responds to appeals and complaints and how they cover health screenings and preventative services. Plans are also rated for both medical benefits and prescription drug benefits, if the plan has drug coverage.
If you want to enroll in a Medicare Advantage plan, you’ll want to consider 3 things before joining:
Once you’ve found a plan, you have a few options to enroll, including:
Medicare Advantage plans can be a great way to manage your out-of-pocket spending while enjoying extra benefits we covered, if you qualify. And they can offer some compelling advantages over Original Medicare, depending on your healthcare needs.
So if you'd like to learn more about Medicare Advantage plans in your area, call 800-620-4519 to reach a licensed insurance agent who may be able to guide you to the right plan for your needs. You can also try online Medicare plan comparison tool.
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