Medicare Advantage plans: same Medicare, different options
What if you could have all of the benefits of Medicare, plus the benefits that come with private insurance? With a Medicare Advantage plan, you can.
Medicare Advantage plans (also called Medicare Part C) are offered by private insurance companies that contract with Medicare. Because they are offered by private insurance companies, Medicare Advantage plans can also include additional benefits and coverage that are not offered by Original Medicare, such as prescription drug coverage.
This flexibility means there’s a lot to learn about shopping for the right Medicare Advantage plan. If you already know what you’re looking for, you can start shopping now. If you’re unsure of what kind of Medicare Advantage plan you need or whether they are right for you, read on for more information
The difference between Original Medicare and Medicare Advantage
Original Medicare patients pay a premium for Part B coverage and only pay a Part A premium if they have not paid into Medicare taxes for 10 years.
Medicare Advantage plans require customers to pay the same premiums as Original Medicare. In addition, each plan may or may not have its own premium.
Original Medicare patients pay a deductible as well as coinsurance, or a percentage of the service received (usually 20% for Part B).
Medicare Advantage plans have deductibles, but may offer copays instead of coinsurance. The costs of deductibles, copays and/or coinsurance varies with each individual plan.
Original Medicare does not have an out-of-pocket limit, meaning there’s no cap on what you could end up paying out of pocket for covered health care expenses.
All Medicare Advantage plans must come with an out-of-pocket limit, meaning covered expenses over the limit will not cost anything out of pocket. The amount of these limits will vary from plan to plan.
Choice of physician
In most cases, Original Medicare allows patients to visit any doctor or hospital in the country that accepts Medicare.
Medicare Advantage plans that follow a Health Maintenance Organization (HMO) model usually restrict customers to a network of selected physicians. As with many private insurance plans that operate within a network, you may be required to have a Primary Care Physician (PCP) and get referrals to see specialists.
There are Preferred Provider Organization (PPO) Medicare Advantage plans that allow you to see a doctor outside of the network, but it may cost more (more on this later).
Medicare Supplement Insurance
Patients with Original Medicare are free to purchase Medigap to help supplement their Medicare coverage.
Customers with Medicare Advantage plans may not buy Medigap.
Prescription Drug Coverage
Original Medicare customers must purchase a separate Prescription Drug Plan (PDP) from a private insurance company if they wish to obtain coverage for prescription drugs. This is known as Medicare Part D.
Medicare Advantage plans can include coverage for prescription drugs. These are called Medicare Advantage Prescription Drug Plans (MA-PD). If you enroll in a Medicare Advantage plan that does not include prescription drug coverage, you cannot always purchase a Prescription Drug Plan from another company. If you do, you may be disenrolled from your Medicare Advantage plan and reenrolled in Original Medicare.
Dental, vision and hearing
Original Medicare covers services that are deemed medically necessary and does not include dental, vision or hearing benefits.
Some Medicare Advantage plans include coverage for extra benefits such as dental, vision and hearing.
This table will help you easily identify some of the differences between Original Medicare and Medicare Advantage plans:
|Medicare premiums, deductibles and coinsurance
|Medicare premiums, deductibles, copays or coinsurance and potentially an additional premium that is specific to the plan
|Only medically necessary services to treat a disease or condition
|Can cover vision, hearing and dental care in addition to medically necessary procedures
|Medicare Supplement Insurance (Medigap)
|Can purchase a Medigap policy (certain restrictions may apply)
|Cannot purchase a Medigap policy while enrolled in an MA plan
|Choice of providers
|Visit any physician that accepts Medicare
|Most plans require the use of in-network doctors, but a PPO plan may allow for coverage outside of a network at an additional cost
|Prescription drug coverage
|No, but customers may purchase a separate Prescription Drug Plan
|Usually, but plans that do not include coverage do not allow customers to purchase a separate Prescription Drug Plan
|Referrals for specialists
|May need a referral from a Primary Care Physician
Types of Medicare Advantage plans
There are several different typed of Medicare Advantage plans. These are determined by the types of provider networks they use or the structure of the plan. The types include:
- HMO. Health Maintenance Organizations have a specific network of select physicians and may require a referral from a Primary Care Physician before seeing a specialist. But HMOs provide additional benefits like coverage for deductibles and more.
- PPO. A Preferred Provider Organization allows customers to save money when they use a physician inside of the plan’s network. Customers are still able to see doctor’s outside of the network but may have to pay a higher cost.
- PFFS. Private Fee-For-Service plans work similarly to that of Original Medicare, but the plan itself will determine how much it will pay the physician or facility and how much the patient will pay out of pocket.
- SNP. Special Needs Plans provide coverage for those in specific situations such as limited income or certain chronic medical conditions.
- HMOPOS. A HMO Point-of-Service plan operates like a HMO but allows for some services to be covered by an out-of-network physician.
- MSA. A Medical Savings Account plan combines a high-deductible plan with a bank account where money is deposited by Medicare to be used for health care services.
Enrolling in a Medicare Advantage plan
There are certain time periods when customers can enroll in or change a Medicare Advantage plan. In order to make an initial enrollment in a Medicare Advantage plan, you must first be eligible for Original Medicare Part A and Part B. Second, you may not enroll in a Medicare Advantage plan if you have end-stage renal disease.
If you meet that criteria, there are then only certain time frames during which you may enroll:
- Initial Enrollment Period (IEP). This is the seven-month period beginning three months before you turn 65 years old, your birthday month and the three months after turning 65. This is when you can enroll in a Medicare Advantage Plan for the first time.
- Under 65 with a disability. If you are not yet 65 years old but are disabled, you can sign up for a Medicare Advantage Plan 21 months after receiving Social Security or Railroad Retirement Board benefits (RRB).
- General Enrollment Period. January 1 to March 31 is the time to enroll if you didn’t sign up when you first became eligible. If you enroll during this period, you will receive coverage starting July 1. However, you may have to pay a higher premium(s) for enrolling late in Part A and/or Part B.
Changing a Medicare Advantage plan
Once enrolled in a Medicare Advantage Plan, there are then only certain times of the year when you can change plans. There are two different open enrollment periods in which changes to plans may occur.
Oct. 15 – Dec. 7
During this time every year, customers can:
- Change from Original Medicare to a Medicare Advantage Plan or vice versa
- Switch from one Medicare Advantage Plan to another
- Join, drop or switch from one Medicare Prescription Drug Plan to another
Jan. 1 – Feb. 14
During this time each year, customers may leave a Medicare Advantage Plan and enroll in Original Medicare.
Special Enrollment Periods
In addition to the open enrollment periods, there are also Special Enrollment Periods (SEP) where customers can make changes to their Medicare Advantage plans. A Special Enrollment Period is presented to customers who experience life changes that leave them suddenly without healthcare coverage. Some of these include:
- Moving to a new address that is not in the coverage area of your current plan or one that offers additional plans to choose from
- Moving back to the United States after living outside the country
- Moving in or out of a healthcare facility such as a hospital or nursing home
- Leaving an employer-sponsored health insurance plan
While Medicare Advantage plans differ from Original Medicare in a number of ways, one thing remains a constant: It’s important to conduct your due diligence and find the plan that best fits your healthcare needs and budget.
Ready to start shopping for a Medicare Advantage plan? Start comparing plans today, or discuss your options with a licensed health insurance agent at (800) 827-9990.