Medicare Advantage

Some doctor’s offices call Medicare Advantage plans “replacement plans,” but they are more accurately called Part C of Medicare. These plans were created under the Balanced Budget Act of 1997 and signed into law by President Bill Clinton.

Medicare Advantage plans fall under Part C of Medicare. These plans often have networks, and some may require referrals to see specialists.

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 open enrollment window for Medigap and now cannot qualify for Medigap due to health conditions.

How Medicare Advantage Works

A Medicare Advantage plan is a private health insurance plan that you can join as an alternative way to get your Part A and Part B benefits from Medicare. When you join a Medicare Advantage plan, Medicare will pay the plan a fee every month to administer your Part A and B benefits.

You must continue to be enrolled in both Medicare Part A and B while enrolled in your Medicare Advantage plan. Medicare pays the Advantage plan 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 and your providers will bill the plan instead of Original Medicare.

Each Advantage plan has its own summary of benefits that 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, labwork and so on.

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.

See our Medicare Part C page for more on what Medicare Advantage covers.

Medicare Advantage Networks

Most Medicare Advantage plans have HMO or PPO networks. In exchange for the lower premiums that Advantage plans offer, you agree to certain rules.

Medicare HMO networks generally require you to only see network providers, except in emergencies. You will usually need to select a primary care physician. That physician can coordinate a referral if you need to see a specialist. There are some HMO plans that offer a point-of-service feature where you can see out-of-network providers in certain circumstances.

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 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 to care also different.

Basic Medicare Advantage Rules

If you are deciding between Medicare Advantage and Medigap, you’ll want to consider some of the rules before you enroll:

Enrolling in a Medicare Advantage Plan: You must be enrolled in both Medicare Part A & B and live in the plan service area. Some people think they can drop Part B if they enroll in Medicare Advantage. That is incorrect If you drop Part B while enrolled, you will immediately be disenrolled from your Medicare Advantage plan.
In-Network Providers: Use network doctors and hospitals for the lowest out-of-pocket costs. Plans may have HMO or PPO networks. Most Medicare HMO plans do not cover anything out of network except emergencies. In PPO networks, seeing a provider outside the network will result in higher spending for you.
Prior Authorization: Advantage plans may require prior authorization for certain procedures. You may need to obtain a referral from your primary care physician before seeing a specialist on many HMO plans.

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 because they should have been sent to your Medicare Advantage insurance company for processing.

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 Enrollment Periods

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 an MAPD 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.

Medicare Advantage Open Enrollment Period

Some people join Medicare Advantage plans without doing any research about how these plans work or speaking with an agent who can advise them. Therefore, they may not be aware of all the rules and find themselves enrolled in a plan that their doctor doesn’t accept or that doesn’t include one of their medications.

Congress has designed the Medicare Advantage Open Enrollment Period to allow people to make changes to their plans if they find themselves in this situation. The Open Enrollment Period 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 also be allowed to add a standalone Part D drug plan.

However, this does not guarantee that you can return to the Medigap plan you had before. Unless this was your first time ever in a Medicare Advantage plan, then you will usually have to answer health questions and go through medical underwriting to get re-approved for Medigap. Consider this before dropping any Medigap plan to go to Medicare Advantage.

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.

What are the differences between Medicare and Medicare Advantage?

Original Medicare is run by the federal government, while Medicare Advantage plans are offered by private insurance companies.

Medicare Advantage plans must cover everything that Original Medicare covers, but they can also offer extra benefits like dental, vision, and prescription drug coverage.

Most Medicare Advantage plans have low monthly premiums, but you must continue to pay your Medicare Part B premium.

With Original Medicare, you pay for medical services as you use them in the form of copays and coinsurance. With Medicare Advantage, you may have an out-of-pocket maximum cap to protect you against catastrophic spending.

Some Medicare Advantage plans also include benefits for things like limited vision coverage. Limitations, copayments, and restrictions may apply.

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.

Medigap vs Medicare Advantage

There’s a lot to think about when you’re trying to choose between Medigap and Medicare Advantage. Both have their pros and cons, and it’s important to understand the difference before making a decision.

Medigap plans are offered by private companies and can help cover some of the costs that Original Medicare doesn’t. One of the biggest advantages of Medigap is that you can see any doctor that accepts Medicare, without having to worry about whether or not they’re in your specific insurance company’s network. Another plus is that some Medigap plans offer fuller coverage on the back end, which means you could end up paying less out of pocket overall.

However, there are some downsides to Medigap plans as well. One is that they don’t include Part D coverage, so you’ll need to buy a separate policy for that. Additionally, they also don’t offer any routine dental, vision, or hearing coverage, which some Medicare Advantage plans may include.

At the end of the day, there’s no right or wrong answer when it comes to Medigap vs Medicare Advantage. It’s all about what works best for you and your situation. Be sure to do your research and ask plenty of questions before making a decision.

Other Considerations about Medicare Advantage

Be sure to carefully consider these things before joining a plan:

Not all hospitals and doctors accept Advantage plans. Ask your agent to help you verify whether your providers accept the plan you are interested in.
Advantage plan benefits may change every year. In September, you will receive a packet from your Part C insurance company telling you what is changing. The plan’s benefits, formulary, pharmacy network, provider network, premium and/or co-payments, and co-insurance may change on January 1st of each year.
Will you be diligent enough to review your annual packet and communicate with your agent if you have concerns about the changes?
Your enrollment is generally for the entire year. You may only dis-enroll from an Advantage plan during certain times of the year. Suppose you decide in April that you don’t like the plan. In that case, you will have to wait until the following annual election period begins in October in order to change your plan unless you qualify for a special election period.
If you enroll in one at age 65, you need to be sure you want this coverage long-term. Your open enrollment window to get a Medigap plan with no health questions ends 6 months past your Part B effective date. You might not be able to get a Medigap plan later if you have health conditions because applying for Medigap later will require you to answer medical questions. You can be turned down for Medigap at that point if you are not healthy enough to qualify.

Do you pay the Part B premium with Medicare Advantage?

Yes, you must enroll in both Medicare Parts A and B before you are eligible to add on an Advantage plan. This is true even if the Advantag plan itself has a $0 premium. You will still pay your Part B premium to Medicare every month.

How can Medicare Advantage plans be free?

Medicare Advantage plans are not free. Some plans have a $0 premium, which means you pay no premium for the plan itself, but you will still pay the Part B premiumage plan itself has a $0 premium. You will still pay your Part B premium to Medicare every month.

What is a MAPD?

A MAPD is a Medicare Advantage Prescription Drug plan. This would be an Advantage plan that includes drug coverage. Advantage plans that do not include drug coverage are abbreviated to MA.

Conclusion

People often ask us our opinion on which plan is the best Medicare Advantage plan. This varies based on a number of personal factors. What’s right for your friend or neighbor may not be right for you. Don’t risk making a mistake on something as critical as your health insurance. Get help from an experienced agent who can explain your options in detail.