Introduction
First, let’s understand what Medicare Advantage is. It is known as Part C of Medicare and also referred to as a “Medicare Health Plan”. Also, the acronyms MA (Medicare Advantage) and MAPD (Medicare Advantage with Part D) are attributed to this part of Medicare.
We’ll leave the history of Medicare Advantage to Wikipedia. Here is a concise understanding of this type of coverage for those who are considering it.
There are currently over twenty million beneficiaries on a Medicare Advantage plan; over one third of all eligible.
Eligibility
Qualifying for most is having Part A coverage and paying a Part B premium. Medicare Advantage plans are issued by private insurers who operate under Medicare rules. They become your primary coverage.
These plans are increasing in popularity as expert research is showing improved health outcomes and savings on the cost of care.
Our goal is to arm you with good information, without the hype and misdirection that surrounds this type of coverage.
The Good
Generally, these plans have a zero premium.
This is attractive especially for seniors on fixed incomes whose under 65 health insurance premiums under ACA were a financial burden.
They include copays (fixed fee) for many services.
Dr. visits, hospital room and board and can include ER visits, outpatient procedures and other related health care services are generally a fixed copay in the more popular plans.
This creates a predictable understanding of cost especially helpful to those on fixed incomes.
They have a Maximum Out Of Pocket or MOOP.
Under Original Medicare there is unlimited annual Part B risk in terms of coinsurance (cost sharing of 20% due by the beneficiary annually and resetting every year). The MOOP creates a cap or limit to one’s risk.
Depending on the plan that can range from $1500 to $6700 for 2020.
Plans may include prescription (Part D) coverage.
For beneficiaries in Original Medicare with or without Medigap (Medicare Supplemental Plans) prescription Part D coverage comes in a separate plan with an additional premium.
MAPD plans (the PD is Part D) include this coverage without the premium and the plans may have better coverage for medications that the standalone Part D in your area. It’s another way to save money.
They provide other valuable added services.
Such as routine dental, vision and hearing and health maintenance services like over the counter drugs, gym memberships and virtual office visits.
There is additional help for those of limited income and certain health conditions.
These are referred to as Special Needs Plans, SNPs or “Snips”. They can provide additional services, help with prescription costs and Part B premiums and other targeted benefits.
They are only available to those who qualify. These particular plans may also have enrollment periodically during the year.
Are Your Medicare Part B Premiums A Financial Burden?
Your Medicare Advantage Plan can help pay them. Qualify regardless of income! Learn more.
The Bad
They contain networks that can be restrictive.
Under Original Medicare you have “open access” that is, if a participant takes Medicare they will provide services regardless of where they or you are located.
There are however PPO (Preferred Provider Networks) plans that have coverage regionally or even nationwide. Copays may be higher though, and cost sharing (coinsurance) may also apply.
You should weigh the expected cost of care in a PPO versus the premiums of Medigap & Part D or the risk of Original Medicare. This is part of our diagnostic for all beneficiaries considering this option.
Most Beneficiaries leave their MAPD plan due lack of access to providers.
With Medicare Advantage the vast majority of beneficiaries are in plans that contain a network. Most plans in this group are HMOs (Health Maintenance Organizations).
These plans generally require a Primary Care Physician (PCP) and referrals for any specialist with rare exceptions (Like OBGYNS).
These plans trade access for risk as they tend to have the lowest MOOP and copays although especially in urban areas the networks can be great.
As long as you are happy with a PCP, access to specialists and quality facilities (hospitals and surgical centers) these plans can work very well.
There are HMO-POS plans that provide more flexibility, still require a PCP but usually do not require referrals and specialist/facility networks tend to be a little better.
There may be a compromise in the form of a higher MOOP and copays in certain cases so it makes sense to compare. They also may have out of network coverage but the PCP is still essential (as in POS or the Point of Service) and services may be charged as coinsurance or shared costs rather than a fixed fee copay.
Lastly there are PPO plans. PPO (Preferred Provider Organization) plans generally have the best level of access. However, local and regional PPOs have emerged that are a subset of what most people, especially those used to “open access PPOs” in their pre-Medicare days, find to be somewhat restrictive.
A PCP is not required and neither are referrals to specialists.
Unlike most other plans, PPO plans may have a premium. Out of network coverage operates similarly to HMO-POS plans.
It is essential that the beneficiary get an analysis either from Medicare.gov if they are computer savvy or from a licensed, appointed, and preferably independent agent contracted with the top carriers in your area.
You are committed to the plan for the plan year.
All plans operate on a calendar year and there are restrictions to changing plans. There is an Annual Election Period (AEP) from October 15 – December 7 each year and an Open Enrollment Period at the beginning of the year.
Certain plans that have the highest overall Star Rating of Five Stars may enroll year-round. Other circumstances may trigger a Special Enrollment Period (SEP) such as moving out of a coverage area.
Medicare Advantage is like any health insurance in that the plan renews automatically. Unless you forfeit all coverage and you do not qualify in any other sense you are committed to the plan for the year and may only avoid automatic renewal by enrolling in a new plan or going back to Original Medicare.
The ability to change plans in AEP is not guaranteed.
Most beneficiaries are not aware of this. Although the option to change is the benchmark of AEP (aka Open Enrollment erroneously) you are still subject to underwriting approval. If you are in the middle of care for certain, mostly serious conditions or are scheduled for procedures related to one, you may be declined.
Going through a “prescreen” either directly with the carrier or through an agent can save you from disappointment if you have these concerns. Conversely if certain condition that no longer exists kept you from a better plan in the past, a prescreen is worth the effort if the desired plan achieves better health outcomes.
The Ugly
Everything changes but the monthly premium.
In every AEP carriers revise plans. This may include changes to networks, cost of services, MOOP and plans may come into or leave coverage areas.
Plans may also be eliminated in entirety and may or may not be replaced. New plans may also be introduced.
Not all changes are bad and it is a good idea prior to renewal to review changes to cost and access.
You cannot leave the plan if your PCP or specialist leaves the network in the middle of a plan year.
Doctors retire or leave the area. Especially with your primary doctor, it is always a good idea to get her take on the future related to the plan.
If you decide to go back to Original Medicare there may be substantial risk.
It only makes sense to stay in Original Medicare if you can offset the 20% cost sharing in Part B (coinsurance) with a Medicare Supplement (Medigap).
In addition to cost concerns, if you do not qualify medically for the Medigap then you should look for better options in Medicare Advantage.
Medicare Advantage can be an excellent option once you know the Good, the Bad and the Ugly and have chosen a plan that is best suited to your unique health situation.
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