Medicare Advantage Plans
Understanding Medicare Advantage Plans
A Medicare Advantage Plan is an option for those with Medicare. They are health insurance plans that are a part of the Medicare program and provided by private insurance companies. If you join one of these plans, you get your Medicare-covered health care through that plan. Most of the Medicare Advantage plans include prescription drug coverage but some of these plans, for certain specific circumstances, do not have prescription drug plan. If drug coverage is needed it is strongly advised to get a plan with Rx coverage for you cannot buy a separate prescription plan when you have a Medicare Advantage Plan.
In most Medicare Advantage plans, there are extra benefits and lower co-payments than in Original Medicare. However, you must access care through a specific network of doctors and you might be required to have a primary care physician who manages your healthcare needs as well as go to certain hospitals to receive your medical services.
To join a Medicare Advantage Plan, you must have Medicare Part A and Medicare Part B. You must continue to pay your monthly Medicare Part B premium to Medicare. In addition, you might have to pay a monthly premium to your Medicare Advantage Plan for the benefits that they provide.
Explanation of common terms used Medicare:
- Part A is coverage for “In-Hospital” expenses (part of Original Medicare)
- Part B is coverage for “Out-Patient” expenses (part of Original Medicare)
- Part C is the Medicare Advantage program (provided by private insurance) which you can choose to participate in or you may choose to obtain a Medicare Supplement instead. (We will discuss both options)
- Part D is the Prescription Drug Program portion of Medicare. Also, known as a MAPD.
- Medigap – Also known as a Medicare Supplement plan (provided by private insurance)
The most common types of Medicare Advantage Plan are:
HMO – Health Maintenance Organization Plans – Medicare HMO plans normally require referrals from primary care physicians and treatment by specialists and hospitals within the plan’s network.
PPO – Medicare Preferred Provider Organization Plans – Medicare PPO plans allow you to use doctors, hospitals, and providers outside the plan’s network at additional cost.
PFFS – Medicare Private Fee-for-Service Plans Private Fee-for-Service Plans generally allow you to visit any doctor or hospital Original Medicare would allow you to visit, as long as the doctor or hospital agrees to treat you. A PFFS plan can require you to follow strict rules and determines how payments are to be divided between the PFFS and the patient.
MSA – Medicare Medical Savings Account Plans – Medicare MSA plans deposit Medicare funds into an account used for paying your health care costs. These plans normally come with high deductibles resulting in out-of-pocket expenses before coverage begins.
SNP – Medicare Special Needs Plans – Medicare SNPs provide focused, specialized health for specific groups of people including beneficiaries of both Medicare and Medicaid, those in nursing homes, and those with certain chronic conditions.
All Medicare Advantage Plans must include a limit on your out-of-pocket expenses for Part A and B services (for example, the out-of-pocket maximum for HMO plans in 2017 is $6,700). Plans can’t include cost-sharing (copays or coinsurances) that are higher than they would be under Original Medicare for certain services, like chemotherapy and dialysis, (their coverage must be at least equal to Medicare) but they can have higher cost sharing for other services. Medicare Advantage Plans can also provide additional benefits that Original Medicare does not cover, such as routine vision or dental care.
As noted above, different types of plans have different rules for how and where you can get coverage. However, even plans of the same type offered by different companies may have different rules, so you should always check with a to a licensed insurance broker to find out how its coverage works.
You can join a Medicare Advantage Plan if:
- You have Medicare Parts A and B;
- You live in the plan’s service area; and
- You do not have End-Stage Renal Disease (ESRD).
Note: If you have ESRD that requires dialysis or a kidney transplant, you can enroll in a Medicare Advantage Plan if you join a Special Needs Plan (SNP) that specifically accepts people with ESRD or if other special circumstances apply.
If you want Medicare coverage through a Medicare Advantage Plan and also want drug coverage (Part D), you must generally choose a plan that offers Part D drug coverage as part of its benefits package. If you join an MSA, a PFFS without drug coverage, or a Cost Plan, you can join a stand-alone Part D drug plan.
If you have health coverage from your union or current or former employer when you become eligible for Medicare, you may automatically be enrolled in a Medicare Advantage Plan that they sponsor. You have the choice to stay with this plan, switch to Original Medicare, or enroll in a different Medicare Advantage Plan. Be aware that if you switch to Original Medicare or enroll in a different Medicare Advantage Plan, your employer or union could terminate or reduce your health benefits, the health benefits of your dependents, and any other benefits you get from your company. Talk to your employer/union and your plan before making changes to find out how your health benefits and other benefits may be affected. Some employer/unions will work with outside carriers to an extent.
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