How Medicare Advantage Plans Work
Medicare Advantage Plans are also called Medicare Part C. These plans are offered by private insurers. They provide all Part A and Part B coverage and usually offer extra benefits as well. In many cases, the premiums, co-pays and deductibles can be lower than they are in a Medigap policy.
When you join a Medicare Advantage Plan, you are still in Medicare, however the insurance company coordinates with Medicare for you. You deal with the insurance provider directly. Like Medigap, these plans offer extra benefits that fill in the gaps of Medicare. In addition, most MAs include Part D prescription drug coverage.
Depending on which plan you pick, you may be limited to doctors and hospitals that belong to the plan's network. There are three main types of MA Plans: Medicare Health Maintenance Organization (HMOs), Medicare Preferred Provider Organization (PPOs), and Medicare Private Fee-for-Service (PFFS) Plans.
Medicare Advantage plans have a feature called 'maximum out-of-pocket,' which sets a limit on the total dollars you are liable for paying in a given plan year. This number does not include premium payments, but provides protection in the case of a catastrophic medical event.
Here is a brief description of how each type of MA plan works:
- Medicare HMO Plans
Except for emergencies, you generally must get your care from primary care doctors, specialists, or hospitals in the plan's network.
- Medicare PPO Plans
In most of these plans, you can visit any physician regardless of whether they are in or out of the plan's network of participating providers. However, you will pay less if you use primary care doctors, specialists, and hospitals in the plan's network.
- Medicare PFFS Plans
If you join one of these plans, you can go to any primary care doctor, specialist, or hospital that accepts the terms of the plan's payment.
Consider these factors when deciding which plan is best for your parents' needs:
What will you pay out-of-pocket, including premiums, deductibles, and other cost-sharing? Some plans help pay your share of the cost (coinsurance, co-payments, or deductibles) of Medicare-covered services.
Are extra benefits and services, like eye exams, dental benefits, hearing aids, or emergency health care outside the United States covered? (These may be covered by some plans.) Does the plan include all Medicare benefits (Part A and Part B) as well as prescription drug coverage?
- Doctor and Hospital Choice
Can you see the doctor(s) you want? Do you need a referral to see a specialist? Can you go to the hospital you want? Do you pay less to go to certain doctors or hospitals? Contact the plan for more information about their doctors and hospitals.
Where are the doctor's offices? What are their hours? Is there paperwork? Are they accepting new patients? Do you spend part of each year in another state? Will the plan cover you there?
- Prescription Drugs
Are your drugs covered under the plan's formulary (list of covered drugs)? What will your prescription drugs cost under the plan? What is the premium for the plan? What is the deductible for the plan? Does the plan provide some coverage in the gap (the "donut hole")?
- Pharmacy Choice
What pharmacies can you use?
- Quality and Performance
Quality of care and performance varies among plans, doctors, hospitals, and other health care providers. Giving good quality health care means doing the right thing, at the right time, in the right way, for the right person – and getting the best possible results.
After you gather the data about your plan choices and have thought about what features make the difference for you, take your time sorting through all of the information.
Ask more questions and talk to people and groups that you trust. Your home state's insurance assistance program should have specific information about the plans in your area, as well as any state laws or regulations that affect people with Medicare.
The more you learn about your Medicare choices, the better prepared you will be to make the selection that is right for you.
Points to Keep in Mind
Doing your research is the best way to choose the plan that's right for you. Keep these key points in mind when researching Medigap and Medicare Advantage policies:
- Plans vary by state and even by zip code.
- Different insurance companies offer different packages, premiums and coverage options. After you choose whether a Medigap or Medicare Advantage plan is right for you, then you must select an insurance provider.
- Both plans have yearly enrollment periods, meaning that once a year, you will have the opportunity to change your plan or coverage.
- If you have other health care coverage, such as Medicaid or retiree health insurance from an employer or a union, find out how these will work with each Medicare plan before you make any changes to your current coverage.
Insurance companies that offer Medicare advantage plans include:
- United Healthcare