What are Medicare Advantage Plans?

Medicare Advantage plans (Medicare Part C) are unique in that they provide a bundled alternative to the Original Medicare that you might already be enrolled in. These plans are offered specifically by private insurers that have been directly approved by Medicare. Even if you sign up for one of these plans, you will still have Original Medicare. The bundled plans that you can select will typically include Medicare Part A, Medicare Part B, and Medicare Part D, the latter of which is a plan that’s dedicated to providing coverage for prescription drugs.

Medicare sets a variety of rules that the companies offering Medicare Advantage Plans must follow. However, each Medicare Advantage plan has the ability to require different out-of-pocket payments. These plans may also have different requirements on whether a referral is necessary to schedule an appointment with a specialist and if you can go to a doctor or health care provider for care that isn’t considered to be urgent or an emergency. Since the benefits and features of each Medicare Part C plan can vary significantly, it’s important that you thoroughly read the details of your plan before you enroll in it.

Related Topics

How do Medicare Advantage Plans Work?

There are many different Medicare Advantage Plans that you can enroll in when you want to bundle your Medicare plans. The six primary Medicare Advantage plans include:

  • Health maintenance organization plans
  • Preferred provider organization plans
  • Special needs plans
  • Private fee-for-service plans
  • HMO point-of-service plans
  • Medical savings account plans

While each type of plan is viable, the main two plans that are typically obtained with Medicare Advantage include PPO plans and HMO plans. A preferred provider organization plan is one that comes with a network of doctors and similar health care providers that you can visit for less money. If ever you go to a doctor or hospital outside of this network, you will need to pay more.

A health maintenance organization plan also comes with a network of doctors and hospitals that you can visit when you want to pay less, which means that visiting a doctor outside of the network will result in a larger bill. However, HMO plans typically allow an individual to visit an out-of-network doctor or hospital in the event of an emergency or urgent situation, which removes some of the hassles and frustrations that can occur with a PPO plan. In order to be eligible for a Medicare Advantage Plan, you must already have Parts A and B of Medicare. While individuals who suffer from end-stage renal disease will oftentimes be able to qualify for standard Medicare, they’re typically unable to join a Medicare Advantage plan.

When you enroll in a Medicare Advantage plan, nearly all services that were covered by Medicare Parts A and B will also be covered. The only service that isn’t available with Medicare Part C is hospice care. Even if you enroll in a Medicare Advantage plan, hospice care will continue to be covered by standard Medicare. No matter which Medicare Advantage plan you choose, emergency room and urgent care visits will always be covered. If you want some additional benefits, many of these plans will provide coverage for:

  • Wellness programs
  • Dental care
  • Glasses

The majority of these plans will also cover prescription drugs via a Medicare Part D plan. The best aspect of a Medicare Part D plan is that at least two drugs are covered in every medication category, which means that you should be able to receive coverage for the medication that you require. There are a couple of types of Medicare Advantage plans that usually don’t provide prescription drug coverage, which means that you would need to select a Part D plan on its own. For instance, medical savings account plans are unable to offer coverage for prescription drugs. On the other hand, certain private fee-for-service plans choose not to offer drug coverage.

Comparing Medicare Advantage Vs. Medigap

Aside from Parts A and B of Medicare, many people find it difficult to understand the differences between the extra Medicare options that are available to select from, the primary of which include Medicare Advantage and Medigap. When you select a Medicare Advantage plan, you’ll be able to receive Parts A, B, and D of Medicare without needing to purchase them separately. All of this is done directly through a private insurance company, which means that additional health care services may also be available aside from the ones offered through Medicare.

With this type of plan, you would be required to pay the standard monthly premium for your Medicare Advantage plan as well as a premium for your Part B plan. A Medicare Part C plan is very similar to the private health insurance policies that you could obtain before you turned 65 and qualified for Medicare. As such, the majority of health care services are completely covered save for a small copay. A yearly limit may also be placed on the amount of out-of-pocket expenses that you would be expected to pay.

As for Medigap plans, these are considered to be Medicare Supplement plans, which means that they are designed to cover some of the extra costs that aren’t directly covered by standard Medicare. When you are enrolled in Medicare Part A and Medicare Part B, you’ll usually be required to pay coinsurance, copayments, and deductibles for the health care services that you obtain. By selecting a Medigap plan, you can cover some or all of these additional costs.

Keep in mind that these plans require you to pay a relatively small premium every month. With Medigap, you’ll have ten distinct plans to select from, each of which offers extensive benefits. The best way to determine which Medigap plan is right for you is to identify what your health care needs are. In general, both of these plans are designed to protect you from needing to pay exorbitant costs in the event that you have a particularly bad year where numerous doctor or hospital visits are required.

You should also understand the main differences between both of these plans. For instance, a Medigap policy will usually come with a higher premium but less out-of-pocket expenses throughout the year. If your budget isn’t large enough to cover a Medigap policy, a Medicare Advantage plan will usually cost less and cover many more services. Medicare Advantage plans can also limit you to a certain network of doctors and hospitals, which is something you might want to avoid. The choice that you make when selecting one of these two plans largely depends on preference. You should compare the features of both to determine which option applies more to your situation.

Medicare Advantage Open Enrollment Period

In the event that you want to sign up for a Medicare Advantage plan or are considering switching from one plan to another, there are certain times of the year when you will be able to do so, which are referred to as open enrollment periods. The first instance of eligibility comes when your initial enrollment period kicks in, which occurs for the three months before your 65th birthday, the month of your birthday, and the following three months after your birthday. You can choose to enroll in a Medicare Advantage plan at this time.

An open enrollment period is also available each fall, which allows you to switch plans or sign up for your initial Medicare Advantage plan. The fall enrollment period is available from October 15 to December 7 every year. In the event that you qualify for a special enrollment period, you can choose to sign up for a Medicare Part C plan at this time. An additional enrollment period began in 2019, which provides you with the ability to enroll at any time from January 1 until March 31. If ever you wish to leave your Medicare Advantage plan and go back to standard Medicare, you can do so during the yearly disenrollment period, which is available from January 1 until February 14.

How Is Medicare Advantage Funded?

Since Medicare Advantage is offered strictly by private insurance companies, you may be wondering how it’s funded. When a private insurance company offers Medicare Advantage, they are reimbursed directly by the federal government via Medicare, which means that Medicare Advantage is funded by the individuals who sign up for a plan and by Medicare. An Advantage plan is required to offer nearly all of the same services as standard Medicare. In turn, Medicare will pay a certain amount to these companies each month to help in the financing of this coverage.

Costs You Might Pay With a Medicare Advantage Plan

Along with the Part B premium that you’ll be required to pay, you will also typically need to pay a monthly premium for your Medicare Advantage plan. Since there are many different types of plans and companies that offer these plans, the costs can vary significantly. For instance, the average monthly premium for an HMO plan is just under $30. If you want to obtain a regional PPO plan, the average monthly premium is around $41. As for local PPO plans, these can cost upwards of $55 per month.

There are also some plans that come with no premium and cover some or even all of your Medicare Part B premium. Many plans will be equipped with a yearly deductible that you will need to pay before the benefits kick in. Since all of these costs can vary substantially from plan to plan, you should shop around before selecting the plan that fits your needs.

What are the Pros and Cons of Medicare Advantage Plans?

Among the most notable benefits of a Medicare Advantage plan is that you’ll be able to obtain more benefits than you would receive with standard Medicare. You can also get stand-alone Part D coverage for prescription drugs in a single plan. When you enroll in a Medicare Advantage plan, you might be able to pay less than would be necessary with standard Medicare. Many Medicare Part C plans to set maximum limits for out-of-pocket expenses, which isn’t the case with standard Medicare.

When considering the negative aspects of a Medicare Advantage plan, many of these plans come with service areas that restrict where you can go to receive care. These plans also tend to require a referral from a doctor before you’re able to see a specialist, which can be time-consuming, they also require you to stay with a provider network. If you’re weighing the pros and cons of your Medicare options, you should consider enrolling into Medicare Advantage if you want to enjoy extra benefits:

  • Want prescription drug coverage in a single plan
  • Want to obtain additional health care benefits like eye care, dental care, and even fitness programs
  • Would like to benefit from a maximum spending limit for out-of-pocket expenses

To learn more about Medicare benefits, including Medicare Advantage, Medicare Prescription Drug plans, Medicare Supplement insurance and coverage options thru the Medicare program, feel free to contact us and talk directly with one of our licensed insurance agents to learn more.