Navigating Medicare, after having traditional health insurance for many years, can be a significant challenge. Medicare has many parts, labeled Part A, Part B, Part C, and Part D. Each may or may not apply to you depending on the choices you make.
Fortunately, you can make choices that help you get the coverage you need. Many Americans find that Medicare Advantage plans help them do just that. You get better coverage than you would with Original Medicare, and you work with traditional insurance companies instead of the government.
How do you choose the right Medicare Advantage Plan? How do they compare to Original Medicare and other add-on options? Here’s what you need to know.
What is a Medicare Advantage Plan?
Medicare’s many coverages don’t help with certain significant costs. Because the plan pays a portion of the cost, the patient ends up paying the other percentage. Often this split is 80% Medicare and 20% you.
As you might guess, it’s easy for even 20% of a medical bill to be far more than you can afford. That’s where additional coverages such and Medicare Advantage come in. It is a plan designed to help you afford the extra costs that Original Medicare leaves you with.
Medicare Advantage (MA), often called Medicare Part C, is a full alternative to Original Medicare. That means you can’t have both Original Medicare and Medicare Advantage – you have to choose between them.
MA plans are offered by private companies but are approved by Medicare. As a result, although you choose your plan through another company, you’re still considered to be “on Medicare.”
A Medicare Advantage plan includes hospital insurance (Medicare Part A), medical insurance (Medicare Part B), and often prescription drug coverage (Medicare Part D). You’ll also have specific copays and deductibles that may be more manageable than the Original Medicare defaults.
The benefit of having an MA plan is that you may also get additional coverage. This additional coverage can include vision, dental, or hearing insurance that Original Medicare does not include. In fact, recent changes in 2019 allow Advantage plans to offer even more unique coverage options. These include help with rides to appointments, groceries, and even medical devices and home modifications.
You’ll also always be covered for emergency and urgently needed care. The plan, however, may not cover services that aren’t deemed medically necessary by Medicare.
If you choose a Medicare Advantage plan, you’ll pay your Medicare Premium and may also pay an additional amount for the MA coverage. Be sure you compare coverage, out-of-pocket costs, and premiums before deciding on a plan.
Medicare Advantage vs. Original Medicare
Medicare Advantage is very similar to Original Medicare. Medicare pays a fixed amount to companies that offer MA plans, and these plans must obey Medicare’s rules.
There are, however, some important differences. Most importantly, each MA plan can set different out-of-pocket costs. There may also be an annual or lifetime maximum on how much you have to pay, which Original Medicare does not have. This can lead to savings over Original Medicare if you have significant health issues – even for just one year.
There can also be different rules about whether you need a referral to see a specialist or if you need to see specific in-network doctors for non-emergency and non-urgent care to receive coverage.
As mentioned earlier, an MA plan may offer additional coverage that you cannot get through Original Medicare, and the prescription coverage may be better. The extra benefits vary from one Advantage plan to another, so don’t be shy about shopping around.
Another important difference is that an MA plan generally only applies in the area in which you reside. That means if you travel frequently, Medicare Advantage is probably not a great choice.
Medicare Advantage vs. Medigap
Another alternative to Original Medicare is Medigap plans. Also known as Medicare Supplement Insurance, these plans get added to your Original Medicare rather than replacing it.
Like Medicare Advantage, the purpose of Medigap is to cover things Original Medicare doesn’t, including deductibles, copays, and medical expenses that can be financially devastating.
Medigap can have higher monthly premiums, which you have to pay in addition to your Medicare Part B premium. However, out-of-pocket costs can be a lot lower. On the other hand, an MA plan costs less and may cover more services, but you’ll pay more when you get care.
With Medigap, you can receive treatment at any doctor or facility that accepts Medicare, so it can be more helpful if you travel. However, if the doctor does not accept Medicare, your Medigap coverage will not apply. An MA plan will generally not provide coverage outside of the specific provider network.
How to Choose a Medicare Advantage Plan
Once you’ve decided to go with an MA plan, it’s time to see what’s available in your area and compare your options. The open enrollment period is between October 15th and December 7th each year – this is the only time that you can change your plan.
Use Medicare’s Plan Finder to find and compare policies in your area.
In order to qualify for Medicare Advantage, you need to be eligible for Medicare Part A and Part B. You also have to live in the service area of the Advantage plan you’re reviewing. Additionally, in most cases, you cannot have end-stage renal disease.
Depending on where you live, you may find that there are a lot of MA plans available or very few. Regardless, there are several things to keep in mind as you compare plans.
Compare Monthly Premiums
Monthly premiums, in addition to Medicare Part B payments, are the first thing to look at. You might be immediately attracted to those that have a premium of $0, meaning that you don’t have to pay any extra beyond what you already do.
However, it’s important to make sure that the premium represents a good value. If the plan doesn’t have a good network that includes your existing doctors, for instance, it may not be a good choice.
On the other hand, an MA plan that has a higher monthly cost but also covers some or all of your Medicare Part B premium could be a great value once you add up the total cost.
Look at the Annual Deductible and Copays
Once you’ve considered the monthly premium, it’s time to look at other cost factors. First, pay attention to the annual deductible. It is the amount you pay before your coverage begins. Are you comfortable with that amount and able to pay it if necessary?
Next, look at the other copays and out-of-pocket costs. For instance, seeing a regular doctor might have a copay of $20, or it may have a copay of 5%. Those are vastly different, so be sure you understand what you’re expected to pay.
If you think you might need specific procedures, look at the out-of-pocket costs involved. For instance, an outpatient surgery might have a copay of $600, which is much less than the 20% you’d pay with Original Medicare. However, another Medicare Advantage plan might have a lower copay.
Compare Out-of-Pocket Limits
One of the best features of an MA plan is that your maximum payment is limited. With Original Medicare, there’s no limit – you simply pay 20%, no matter how much the total bill is. A single year of poor health or one major health event could result in significant financial difficulty or even complete ruin.
All MA plans have a maximum out-of-pocket limit. Once you hit that limit, the plan covers 100% of your covered medical costs for the rest of the year.
As you look at various plans and their costs, compare how the deductible and out-of-pocket limits stack up for different plans.
Look at Prescription Drug Coverage
Many Medicare Advantage plans include prescription drug coverage, but what medications are covered and what the copays are will vary. Be sure that all of your usual drugs are covered before you select a plan.
You’ll also want to note what the costs will be to maintain your current drug regimen. Different plans will have different copayments, and some may try to push you toward generics if they are available. If you have questions about a prescription, call the provider and ask before you make a final decision.
Check the Network
All Medicare Advantage plans have a network, and the lower the premium, the more likely that the network is small. Before you get excited about a $0 premium, be sure your current providers are in the network.
You can also check to see that your preferred hospital and specialists are part of the network as well. Usually, this information is easy to find online, but you can also call the plan provider or your medical team to find out.
Finally, find out how (or if) out-of-network non-emergency care is covered. Is there a travel option, or is there a “passport” feature if you snowbird in a different area during part of the year? Your insurer may have networks in both areas you live and can allow you to use the appropriate network for your location.
If you travel frequently and your MA plan does not cover out-of-network care (or makes it extremely expensive), you may want to purchase travel insurance to cover you during trips instead.
Who Has the Best Extra Coverage?
Beyond the usual medical coverage, MA plans offer a host of extra benefits. These may include vision, hearing aid, and dental care, and in 2019 may include other unique coverage as well.
You may find coverage for nutrition services, in-home aides, and assistance with transportation to doctor’s appointments. You might be able to get help paying for in-home modifications that make your home safer, such as grab bars in the bathroom or temporary wheelchair ramps.
As you compare plans, pay attention to these extras and choose a plan that provides the extras that benefit you.
Look at the Star Rating
Medicare evaluates each MA plan and assigns it a rating from one to five stars. These ratings get recalculated each year.
Five stars are the highest quality rating, and one star is the lowest. If you are having trouble choosing between two MA plans, choose the one with the highest rating.
Avoid Making Common Medicare Advantage Mistakes
Choosing a plan can be challenging when you realize how many factors are involved. It’s important not to make key mistakes as you evaluate the plans available.
First, it’s important to know the enrollment period. You can only change your plan during one period of the year, from October 15th to December 7th.
Second, realize that your health issues impact some insurance premiums. You may pay more for a Medigap plan or even fail to qualify if you’ve had serious health issues. So think about that before you decide to give up an MA plan to try to buy a Medigap policy.
You also want to avoid being blinded by a $0 premium. You may find that the network is extremely small, or that the out-of-pocket costs are much higher than other plans. You want to find the best combination of monthly costs and out-of-pocket costs.
Finally, make sure you get the coverage you need right away. You don’t want to be assessed penalties when you try to add Medicare Part D after the fact, and you don’t want to choose a low-cost MA plan that doesn’t offer extra coverage and then discover you need that assistance.
You Can Get the Best Medicare Advantage Plan
While it may seem difficult to wade through all of the options available, they are there because each person’s needs are different. By carefully exploring the options in your area, you can choose the right Medicare Advantage plan.
If you need more help, talk to your medical professionals and ask what they recommend. Ask which plans they take. You can also keep in mind that you’re only committed for one year – you can always reevaluate your situation during the next enrollment period.
When you carefully consider your needs, you’ll be able to choose a plan that gives you just what you need.
Contact us to learn about Over The Counter Benefits Management, and how it can be part of the best medicare advantage plan for you.