Medicare Advantage Plans are a popular option for many seniors who want to receive health care benefits beyond what is covered by traditional Medicare. These plans are offered by private insurance companies and can include additional benefits, such as vision, dental, and prescription drug coverage. In this article, we’ll take a closer look at Medicare Advantage Plans and what they offer.
What are Medicare Advantage Plans?
Medicare Advantage Plans, also known as Part C of Medicare, are a type of health insurance plan offered by private insurance companies that must follow Medicare guidelines. These plans offer all the benefits of Original Medicare (Part A and Part B), as well as additional benefits that are not covered by traditional Medicare. Some of these benefits may include prescription drug coverage, dental care, vision care, gym memberships, wellness, etc.
How do Medicare Advantage Plans work?
When you enroll in a Medicare Advantage Plan, you will still be enrolled in Medicare. However, your health care coverage will be provided by the private insurance company that you choose. You will still need to pay your Medicare Part B premium, as well as any premium required by your Medicare Advantage Plan.
Medicare Advantage Plans are required to cover all of the services that are covered by Original Medicare (with the exception of hospice care, which is still covered by Medicare Part A). In addition, Medicare Advantage Plans may offer additional benefits, such as vision, dental, and prescription drug coverage.
What are the different types of Medicare Advantage Plans?
There are several different types of Medicare Advantage Plans, including Health Maintenance Organization (HMO) Plans, Preferred Provider Organization (PPO) Plans, Private Fee-for-Service (PFFS) Plans, and Special Needs Plans (SNP). Each type of plan has its own network of doctors, hospitals, and other healthcare providers that you can use.
HMO Plans generally require you to choose a primary care physician (PCP) and get referrals from your PCP in order to see specialists. PPO Plans allow you to see any doctor or specialist that accepts Medicare, but you will pay less if you use doctors within the plan’s network. PFFS Plans allow you to see any doctor or specialist that accepts Medicare and agrees to the plan’s payment terms.
If you or a loved one has a chronic health condition or disability, you may be eligible for a Special Needs Plan (SNP). SNPs are Medicare Advantage Plans that are designed to provide specialized healthcare coverage for individuals with specific health needs. These plans are designed to provide comprehensive care that is tailored to the individual’s specific health needs. This means that the insurance company is responsible for managing the healthcare needs of the beneficiaries enrolled in their plan, including coordinating care with healthcare providers and ensuring that beneficiaries receive the appropriate care and treatment. There are different versions of SNP, including the Dual Special Needs Plan and Chronic Special Needs Plan.
What are the benefits of Medicare Advantage Plans?
One of the main benefits of Medicare Advantage Plans is that they can offer additional benefits that are not covered by traditional Medicare. These benefits may include prescription drug coverage, dental care, and vision care. In addition, Medicare Advantage Plans may have lower out-of-pocket costs than Original Medicare.
Another benefit of Medicare Advantage Plans is that they often provide care coordination and disease management programs, which can help you stay healthy and manage chronic conditions. These programs may include wellness visits, care management, and care coordination.
What are the drawbacks of Medicare Advantage Plans?
Medicare Advantage plans can be an attractive option for some individuals, as they often provide additional benefits and lower out-of-pocket costs than traditional Medicare. However, there are also some potential drawbacks to consider:
- Limited provider networks: Medicare Advantage plans often have limited provider networks, which means that you may not be able to see all of the doctors and specialists that you would like. This can be particularly problematic if you have a complex medical condition that requires specialized care.
- Prior authorization requirements: Medicare Advantage plans may require prior authorization for certain services or treatments, which can create delays and administrative burdens for both patients and providers.
- Out-of-pocket costs: While Medicare Advantage plans often have lower premiums than traditional Medicare, they may also have higher out-of-pocket costs, such as copays and deductibles. This can make it difficult for some individuals to afford necessary medical care.
- Plan changes: Medicare Advantage plans can change their benefits, provider networks, and other features from year to year. This can be confusing for beneficiaries and may require them to switch plans if their current plan no longer meets their needs.
- Limited coverage when traveling: Medicare Advantage plans may provide limited coverage when you are traveling outside of your plan’s service area. This can be a concern for individuals who travel frequently or have a second home in another state.
What Are the Costs of Medicare Advantage Plans?
It may surprise you to discover that some Medicare Advantage plans don’t have a monthly plan premium, meaning you pay zero dollars per month. These plans typically cover services that Original Medicare doesn’t.
This is made possible because private insurance companies enter into contracts with networks of doctors and hospitals to help keep costs manageable. Going outside the network may result in higher out-of-pocket costs. Medicare Advantage plans often provide preventive care and disease management programs, which can lead to lower healthcare expenses for healthy patients. Additionally, if a plan spends less than the government fee, it may pass on the savings to its members in the form of extra benefits or a zero-premium plan.
However, keep in mind that no Medicare Advantage plan is entirely free. You will still need to pay deductibles and copays for covered services, as well as the Part B premium. Nonetheless, a Medicare Advantage plan could be worthwhile for you if the added benefits meet your individual healthcare needs.
Unlike Original Medicare, Medicare Advantage plans to offer one level of predictability: there’s an annual cap on your out-of-pocket expenses which is $8300 in 2023.
When Can I Enroll in Medicare Advantage Plan?
There are various times throughout the year when you can sign up for a Medicare Advantage plan. The Initial Coverage Election Period (ICEP) is one such opportunity. The ICEP usually overlaps with your Initial Enrollment Period (IEP), which begins three months before you turn 65, and you enroll in both Medicare Parts A and B. However, if you choose to sign up for Part B later, your ICEP will commence three months before your Part B coverage starts. This is the time when you can enroll in a Medicare Advantage plan. For more information, refer to our article on the ICEP for Medicare.
Another time when you can look for a Medicare Advantage plan is during the Medicare Annual Enrollment Period (AEP). This period runs from October 15 to December 7 every year, during which you can switch to a new Medicare Advantage plan or enroll in one for the first time.
If you’re already enrolled in a Medicare Advantage plan and want to explore other options with a monthly premium of $0, you can do so during the Medicare Advantage Open Enrollment Period (OEP). This period runs from January 1 to March 31 every year, during which you can disenroll from your current Medicare Advantage plan and switch to a new one.