Medicare Advantage. What It Means To You

Medicare Advantage plans (Part C) are privatized Medicare.  Insurance companies that have annual contracts with the Centers for Medicare & Medicaid are allowed to offer your Medicare benefits, with most plans including prescription coverage.  They must offer all Medicare benefits and contain the same rights & protections of Medicare.  Rather than Medicare being your primary plan, the Advantage plan becomes your primary plan.  These plans typically are HMO, POS or PPO plans.  (HMO usually requires a referral before you see a specialist doctor & require you to always use network doctors unless it’s an emergency; POS is similar to the HMO but allows out of network coverage for some benefits; PPO plans allow you to see both in and out of network doctors typically with no referrals.)

How Medicare Advantage Plans Work 

Advantage plans are typically set up in a region covering several counties, or an area within the state, or the entire state.  When you enroll in an Advantage plan, should you move out of the plan’s service area, you will need to choose another plan for the service area of your new residence.  Most Advantage plans sold today utilize a network of doctors & hospitals for you to use.  They are contracted with the plan and agree to see you for the plan’s contracted rates.  Your charges (copays and coinsurance) are determined by the plan’s Schedule of Benefits.  For example, you may pay $10 to see a primary care physician, $25 to see a specialist, $250 for outpatient surgery, rather than paying the Medicare Part A deductible and Part B deductible & 20% coinsurance.  They are all required to have what is called an Annual Maximum Out of Pocket – this protects you against catastrophic medical bills, unlike Medicare Parts A & B.  This means your copays and share of the bills can never be more than the Annual Maximum, which is usually set at $6,700 or lower – depending on the plan you choose.  Outpatient prescription drug costs do not go toward your Annual Maximum Out of Pocket.

Medicare Advantage Plan Prescription Drug Coverage

If your plan includes prescription drug coverage, it must abide by CMS guidelines.  See the page for Part D Prescription Drug Plans.  Some plans will offer reduced costs for using their mail-order service, limited coverage through the Gap, or other savings for using specific preferred pharmacies.

What do Medicare Advantage Plans cost?

Many plans are offered at $0 monthly premium.  You read that right!  How do they do that?  Medicare pays a fee to the insurance company each month for every member it enrolls.  The insurance company then uses that money to pay your claims and administer your plan.  And, the higher the plans star rating, the more money it receives.  Usually, but not always, plans with lower Annual Maximum Out of Pocket costs will have some type of monthly premium.  In Florida, most plan premiums range from $0 to $75 per month, but some are higher.  Downsides to an Advantage plan can be that they are managed care plans, and many services require prior authorization, and most HMO plans require referrals prior to seeing a specialist.  When enrolling, you agree to stay enrolled for the balance of the calendar year.  However, they are becoming more popular every year.  Many people like the fact that they only pay for the services they receive.  They also like the extra benefits that can be included (unlike with Medicare Parts A & B) such as: fitness club memberships, routine eye care, routine hearing & hearing aids, nursing hotlines, OTC benefits, foreign emergency benefits and more.

Which is better:  Medicare Advantage Plan or Supplement Plan?

Different strokes for different folks. 

A Supplement can offer better/more ease of use because there are no network limitations other than verifying the doctor/facility is participating in Medicare, and you can use it in any of the 50 states without checking in with the plan.  But all plans do have a monthly premium starting as low as $49/month and going up from there to about $250 or more.  (Costs vary by plan, age, area, health & tobacco status)

An Advantage plan can be great for someone that doesn’t use many medical services as you only pay for the services you receive.  Many plans can be had for as little as $0 monthly premium.  However, all plans (with the exception of PFFS plans which are not very popular anymore) have networks, so to get the lowest costs, you will want to use in-network doctors/facilities.  HMO’s always require you to use in-network providers, except in the case of a life-threatening medical emergency and urgent care.  Also, many services require prior authorization, and many HMO’s require referrals to see specialty doctors.  But, they do come with extra benefits you don’t get from Medicare or a Supplement, like fitness club memberships, vision, hearing, etc.

The good news is that you can try an Advantage plan for a one-year trial and if you don’t like it, Medicare will allow you to enroll in, or back into, a Medicare Supplement plan anytime during the one-year period – no questions asked.  But it must be your first time on an Advantage plan, and there may be exceptions to this.

Contact Us For Your Medicare Advantage Insurance Needs

Our customer service doesn’t stop when your policy arrives in the mail.  We’re there for you year after year because as your needs change, so too should your Medicare Advantage Insurance Plans. We have met so many wonderful people in this community, and we look forward to meeting with you. Contact us today by completing our easy online request form  Give us the opportunity to work for you-you’ll be glad you did!