SPECIALIZING IN MEDIGAP MEDICARE ADVANTAGE, & PRESCRIPTION DRUG PLANS
Medicare Advantage plans were created under the Balanced Budget Act of 1997 and signed into law by President Bill Clinton. These plans are commonly called Medicare Part C. Some doctor’s offices call them replacement plans, more on that below.
Advantage plans for Medicare fall under Part C. These plans often have networks and some plans may require you to get referrals to see a specialist.
Congress designed this program to give Medicare beneficiaries a lower-premium option than Medigap. They also have very little Medicare underwriting. This means they are a coverage option for people who missed their Medigap Open Enrollment window and now cannot qualify for Medigap due to health conditions.
Medicare Advantage plans are NOT similar to Medigap plans – they are different. Members get their benefits from a private insurance company instead of original Medicare. As we mentioned, sometimes you’ll hear them referred to as Medicare replacement insurance.
Medicare is not really a fan of this language because it’s not entirely accurate. You never permanently replace your Medicare when you join a Medicare plan. Instead you are just choosing to get your benefits from a private company for the rest of the calendar year. You can always return to Original Medicare during a valid election period.
A Medicare Advantage plan is a private Medicare insurance plan that you may join as an alternative to Medicare. When you do, Medicare pays the plan a fee every month to administer your Part A and B benefits. (That’s why sometimes people call it a Medicare replacement plan.)
You must continue to stay enrolled in both Medicare Part A and B while enrolled in your Medicare Advantage plan. Medicare pays the Medicare Advantage company on your behalf to take on your medical risk. This is how Medicare Advantage plans are funded.
You will present your Advantage plan ID card at the time of treatment. Your providers will bill the plan instead of Original Medicare. Again, this is also why some providers consider them Medicare replacement plans, but it’s important to remember that you can always return to Original Medicare during a new Annual Election Period in the future.
Medicare Advantage plans are not really replacement plans because there is no permanent commitment. They are private plans that pay instead of Original Medicare for that calendar year.
Each Advantage plan has its own summary of benefits. This summary will tell you what your copays will be for various healthcare services. Your plan will offer all the same services as Original Medicare, such as doctor visits, surgeries, lab work and so on.
You might pay $10 to see a primary care doctor. Specialists will often be more – a $50 specialist copay is quite common. Some of the higher copays may come in for diagnostic imaging, hospital stay, and surgeries.
You can usually expect to spend several hundred on copays for these items. However, this varies greatly between states, so review plans in your area to get the specifics.
One neat thing about Medicare Advantage plans is that some of them offer minor benefits for routine dental, vision or hearing. Some plans include gym memberships. When searching for Medicare Advantage plans with dental and vision, our experts here at Boomer Benefits can help you compare those ancillary benefits between carriers.
In exchange for lower premiums that Advantage plans offer, you agree to play by certain rules. Most Medicare Advantage plans have HMO or PPO networks.
Medicare HMO (Health Maintenance Organization) networks generally require to treat only with network providers, except in emergencies. You will need to select a primary care physician. That physician will coordinate a referral if you need to see a specialist.
Medicare HMO plans are the most prevalent type of network. According a study by Mark Farrah associates, they will represent 71% of all Medicare Advantage plans on the market.
Medicare PPO (Preferred Provider Organization) networks allow you to see doctors outside the network but you’ll have substantially higher out-of-pocket spending to do so.
In limited counties, there are Medicare Private-Fee-for-Service plans. These plans may or may not include Part D. How you access care is also different. While this plan type was very common in the past, it has been slowly phased out in most areas.
Some people may feel like the rules restrict or limit them in ways that are disagreeable. However, others are willing to abide by the rules if they find a plan with an attractive low premium.
It’s a personal choice. If you are deciding between Medicare Advantage and Medigap, you’ll want to consider some of the rules before you enroll.
Put your red, white and blue Medicare card in a safe place. Do not give it to any of your healthcare providers. If they bill Medicare, those bills will be rejected.
You must direct your providers to bill your Medicare Advantage plan. People who enroll in Advantage plans for Medicare are agreeing, for the rest of the calendar year, to be covered by the plan instead of Original Medicare.
Medicare Advantage plans have lock-in periods. You can enroll in one during Initial Enrollment Period when you first turn 65. After that, you may enroll or dis-enroll only during certain times of year. Once you enroll in Medicare Advantage, you must stay enrolled in the plan for the rest of the calendar year. You can only opt-out from an Advantage plan during specific times of the year.
The Annual Election Period in the fall is the most common time to change your Medicare Advantage plan. This period runs from October 15th – December 7th each fall. Changes made to your enrollment will take effect January 1.
If you decide to leave a Medicare Advantage plan and return back to Original Medicare, you must notify your Medicare Advantage plan carrier. Otherwise Medicare will continue to show that you are enrolled in the Advantage plan instead of Medicare.
This is a common billing nightmare that we see among people who enrolled on their own without the help of an agent.
It is in your interest to enroll in Medicare Advantage through an insurance agent who can fully explain how the plan works. Enrolling without an agent means you are on your own if problems occur on the back end of your policy.
Some people don’t realize this and join Medicare Advantage plans without the help of an agent. Therefore they don’t know about all of these rules. Sometimes they find themselves enrolled into a plan that their doctor doesn’t accept or that doesn’t include one of their medications. This happens most often in January after a person has used the Annual Election Period to join a Medicare Advantage plan.
For this reason, Congress designed the Medicare Advantage Open Enrollment Period that runs from January 1st – March 31st each year. During this time, you can disenroll from any Medicare Advantage plan and return to Original Medicare. You will be allowed to add a standalone Part D drug plan.
Your other option during the Medicare Advantage Open Enrollment Period is to change from your current Medicare Advantage plan to a different Medicare Advantage plan. Please be aware that you can only use this period once per calendar year.
The intent of Congress in creating these plans was to give you options in accessing your Medicare benefits. Some reasons why people might choose an Advantage plan are:
Remember, it’s a personal choice – there is no right and wrong. Consider Original Medicare vs Medicare Advantage based on your own knowledge of your medical usage.
Without question, Original Medicare with a Medigap plan gives you very comprehensive coverage. The primary differences are that with Medigap plans, you can see any doctor that accepts Medicare. You don’t have to ask your doctors if they take your specific Medigap insurance company. The network is Medicare, which has over 800,000 providers. The network is nationwide, not local.
Medigap plans also have fuller coverage on the back end. Medicare pays 80% and your Medigap plan 20%, leaving you with little out of pocket. You won’t have the repetitive copays that you will on a Part C plan.
Medigap plans also don’t change their benefits from year to year. This means they don’t require as much homework from you. You won’t have to annually review the upcoming benefit changes like you will on an Advantage plan.
However, Medigap plans do not include Part D coverage, so you will need to buy a separate Part D policy. They also do not offer any routine dental, vision or hearing while some Medicare Advantage plans may at least have a little bit of this.
Again, there is no right or wrong. The two types of coverage just work differently. Go with the option that feels right for you.
Be sure to carefully consider these things before joining a plan:
Yes, you must first enroll in both Medicare Parts A and B before you are eligible to add on an Advantage plan. This is true even if the Advantage plan itself has a $0 premium. You will still pay your Part B premium to Medicare every month.
Medicare Advantage plans are definitely not free. Some plans have what are called a $0 premium. This means you pay no premium for the plan itself, but you will still pay the Part B premium to Medicare and you will pay deductibles, copays, and coinsurance as you use your benefits.
When you enroll in a Medicare Advantage plan, Medicare pays the Advantage plan insurance company a monthly fee to take on all of your medical risk. That is the reason why some plans can offer you a $0 premium – they are already getting paid by Medicare on your behalf.