You may not realize that most of the medicare mail you get is probably for Medicare Advantage Plans.
The insurance companies promote certain benefits, but these mailers don’t always tell the whole story.
So what exactly is a Medicare Advantage Plan?
I’m going to break it down in simple terms you can understand.
- What is Medicare Advantage?
- Types of Medicare Advantage
- How to find a Medicare Advantage Plan and enroll in one.
- Advantages & Disadvantages of Medicare Advantage
- What to watch out for
What is Medicare Advantage?
In Part 3 of this Medicare 101 series, I explained Medigap Plans, which are the REAL Medicare Supplement.
Medicare Advantage Plans are NOT Medicare Supplements, or Supplemental Plans, because they are not “supplementing” your Original Medicare.
Medicare Advantage Plans are an Optional Choice – an ALTERNATE WAY to receive your Medicare Benefits.
That’s why Medicare Advantage Plans are referred to as Medicare Part C – because it’s actually a part of Medicare, just a different way to receive your Medicare benefits.
Medicare Advantage Plans are designed to be an equivalent representation of your Medicare Benefits in terms of coverage, but with a different benefit structure.
This means, even though the cost sharing can vary by service, compared to Original Medicare, as a whole, the plans must provide comparable benefits.
The plans are all regulated and approved through CMS (Centers for Medicare & Medicaid Services).
Here’s the major Differences
On Original Medicare, you have access the the Nationwide collection of doctors and hospitals that accept Medicare.
That’s why you get this same level of freedom when you purchase a Medigap policy – Medigap is an “add-on” policy, simply filling the cost gaps.
Medicare Advantage Plans are reminiscent of group health insurance plans; they vary by state, county, and carrier. They each have their own contracted network of providers, and specific breakdown of copays and coinsurance for each and every service.
Medicare Advantage Plans usually include drug coverage (but plans are available without drug coverage for this that already have it or don’t want it).
Medicare Advantage Plan benefits change each and every plan year (the drug portion changes too) – so you need to be especially careful to review your plan every open enrollment.
In contrast, Medigap Plans don’t change.
Types of Medicare Advantage Plans
The main plan types are HMO, PPO, and PFFS (Private Fee for Service).
The Medicare Advantage HMOs are often zero extra premium above what you already pay for Medicare Part B. This makes them very popular.
Medicare Advantage PPOs provide more freedom but often at a price. They may have an additional medical deductible and a monthly premium.
Private Fee for Service Medicare Advantage Plans offer more freedom, but providers must agree to the terms of service.
If some Medicare Advantage plans have a monthly premium, why wouldn’t I just enroll in a Medigap plan instead?
Some folks have gone beyond their Medigap open enrollment and can no longer qualify for a Medigap policy due to a medical condition. In this case they may want additional benefits and a Medicare Advantage Plan may be the only option.
Medicare Advantage Plans only ask one medical question – “Do you have end stage renal disease?” Otherwise, you may enroll during the annual open enrollment, or other special circumstances.
Some areas the country have very high Medigap premiums, compared to others. This may prevent one from considering a Medigap policy. Even if your Medicare Advantage plan has a premium, keep in mind your drug plan is likely included in that cost.
How to Find a Medicare Advantage Plan and Enroll in One
The best place to look for a Medicare Advantage Plan to match your needs is Medicare.gov.
It’s the only place with every single available plan in one search engine.
Simply enter your zip code and you’ll have every plan in front of you.
Even better – enter your list of prescription medications to taylor the list according to lowest cost based on your drugs. (hint – every plan doesn’t cover every drug).
Choose plans 3 at a time to compare benefits side-by-side.
When you have it narrowed down, go directly to the carrier sites to check the provider networks.
You may also start by FIRST calling your primary doctor’s billing department to ask which Medicare Advantage plans they accept.
This gives you a narrower range of plans to start with. Before enrolling, ALWAYS double check with the carrier to make sure your doctor is in the network (your doctor’s office staff may not always have the correct information).
This guide isn’t going into actual plan benefits because:
1.) There are too many plans to share just one,
2.) It’s not allowed by CMS anyway…
3.) The plans vary so much (based on zip code) so you might as well check them out on Medicare.gov.
Ways to enroll
You may enroll directly online through carrier websites, call Medicare to enroll over the phone or use their site Medicare.gov, or use an agent.
Your best bet is to find an agent that represents multiple plans types and carriers, so you know they are representing YOUR best interest, not the insurance company’s.
An agent that has experience with many plan types can help you find the plan that will best suit you. Beware of agents that heavily promote Medicare Advantage plans (the commissions are high, especially for first time enrollments).
Medicare Advantage plans are not for everyone. There is a high rate of complaints because the rules are often misunderstood.
Advantage and Disadvantages
Even the name itself implies there’s an advantage to enrolling in the program.
So What are the Advantages?
I already mentioned that most plans include drug coverage (some plans offer drug coverage with no additional premium).
It’s an added convenience to have multiple plans bundled together with one carrier, and people love the very low, or zero additional monthly premium to get extra coverage.
Many Medicare Advantage plans cover services that Medicare doesn’t cover, such as dental, vision, or hearing.
For example, many plans offer basic dental and vision such as preventive cleanings, and new frames and lenses every two years up to a limited benefit amount.
Some plans offer free gym memberships worth approximately $30 per month.
But keep in mind that you don’t get something for nothing. You are giving up the freedom you have on Original Medicare in order to get these extra benefits.
You may also be giving up your guaranteed acceptance into a Medigap policy, available for only 6 months after your Part B effective date. (This doesn’t mean you may never enroll in a Medigap policy, but you’d have to answer medical questions when applying and could be denied).
Medicare Advantage plan benefits and drug lists may change every year. The contract is year to year.
The network of providers in a plan may change every year also.
You could make a decision to choose a Medicare Advantage plan based on the fact that your doctor is contracted with a plan. He could later decide to leave the plan.
Some doctors never contract with Medicare Advantage plans. If you will always want total freedom to see any provider that accepts Medicare, it’s in your best interest to NOT join a Medicare Advantage plan.
What to watch out for
When you enroll in a plan to supplement your Medicare, just be sure you know exactly WHAT you are enrolling in.
Is it a Medigap policy, or is it a Medicare Advantage Plan?
I already mentioned this, but I want to emphasize again that a Medicare Advantage Plan is NOT a Medicare Supplement.
Don’t confuse Medigap plans with Medicare Advantage PPOs or PFFS plans (Private Fee For Service).
If you want the lifelong freedom of a Medigap plan, there WILL be a monthly premium. Don’t let an agent convince you to enroll in a “zero premium” Medicare Supplement (which might actually be a Medicare Advantage PPO), thinking it’s a Medigap plan.
Next, be sure to review your coverage each year during the open enrollment period.
Whether you have a Medicare Advantage Plan, or a Medigap with stand-alone drug plan, you will have to review these coverages every fall, because they WILL change, and you don’t want any surprises come January.
You can shop for Medigap plans year round as long as you can pass the medical underwriting. (hint – it’s not as hard as you’d think to qualify, so if your rate is high, shop around to lower it).
That pretty much sums up Medicare Advantage plans.
For a more in-depth explanation on how to find the best Medicare Advantage plan, see this guide – How to Find the Best Medicare Advantage Plan Anywhere.