Medicare Advantage (MA) Plans are also called Medicare Part C. Medicare Advantage Plans are a different way that beneficiaries can choose to receive their Original Medicare (Parts A and B) benefits. Rather than being administered by the federal government, Advantage Plans are offered by private insurance companies that have been approved by Medicare, such as Aetna, Blue Cross Blue Shield, Cigna, Humana and UnitedHealthcare. They provide the exact same Part A and Part B coverage but usually offer a few extra benefits as well. In many cases, the overall premiums, co-pays and deductibles of this coverage option can be lower than with Original Medicare and a Medigap policy (also known as a Medicare Supplement Insurance policy).
Differences Between Original Medicare and Advantage Plans
When a senior joins a Medicare Advantage Plan, they deal with the insurance provider directly and the company coordinates with Medicare on their behalf. Like Medigap, these plans offer extra benefits that fill in some gaps in Medicare coverage. For example, most Medicare Advantage Plans include Part D prescription drug coverage and some even cover vision, dental and hearing services. However, the insurance companies have the freedom to determine the premium, coinsurance and copayment amounts that beneficiaries must pay, and these vary greatly between plans.
Unlike Original Medicare, MA Plans feature an annual maximum out-of-pocket (MOOP) spending limit, which caps the total amount a beneficiary is liable to pay for health care in a given year. This number does not include premium payments, but it does include deductibles, coinsurance and copayments. The MOOP cap provides protection in the case of a catastrophic medical event. Once a senior has reached this limit, qualifying health care services are covered at 100 percent for the remainder of the year.
In terms of costs, beneficiaries who choose Medicare Advantage Plans must still pay their Part B premiums. Medicare decides the premium amount for each person, depending on their income, and this is usually deducted automatically from a senior’s Social Security check. Some Part C Plans do not involve an additional premium, but many do, especially those that provide expanded coverage for services outside of Original Medicare. Seniors have the option of deducting their Part C premiums as well, but they must request this.
Types of Medicare Advantage Plans
The most common types of MA Plans include Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), Private Fee-for-Service (PFFS) Plans and Special Needs Plans (SNPs). Depending on which plan a beneficiary picks, they may be limited to doctors and hospitals that belong to the plan’s network.
Here is a brief description of how each type of Medicare Advantage plan works:
- Medicare HMO Plans
HMOs are typically the most affordable option, but they do require beneficiaries to receive care from primary care doctors, specialists or hospitals that are in the plan’s network.
- Medicare PPO Plans
PPO Plans allow beneficiaries to use any physician, regardless of whether they are in the plan’s network. However, using in-network providers is more cost effective.
- Medicare PFFS Plans
Beneficiaries with PFFS Plans can go to any primary care doctor, specialist or hospital that accepts the terms of the plan’s payment. However, there is no guarantee that a doctor will accept a senior’s PFFS Plan even if they accept Medicare, so it’s important to inquire before scheduling appointments and procedures.
- Medicare SNPs
These plans are created specifically for beneficiaries who have unique needs. For example, some SNPs only accept seniors who live in nursing homes, have certain medical conditions or are dual-eligible beneficiaries (those who are eligible for both Medicaid and Medicare).
How to Choose a Medicare Advantage Plan
The following factors are important to consider when making decisions about Medicare coverage.
Compare the total out-of-pocket costs associated with specific plans, including premiums, deductibles and other cost-sharing charges. Some plans help pay a beneficiary’s share of cost for Medicare-covered services through coinsurance, co-payments or deductibles.
Each person’s healthcare needs are unique. While some seniors may require additional prescription drug coverage to help make ends meet, others may take few medications but consider dental coverage indispensable. In addition to Original Medicare, consider what supplemental benefits are useful or downright necessary. Prescription drug, vision, dental and hearing coverage are some of the most popular added benefits that draw seniors to MA Plans. New add-ons, including adult day care, palliative care, in-home care and home modifications, are set to roll out with 2019 MA Plans but these changes are expected to take some time to catch on.
- Doctor and Hospital Choice
When comparing MA Plans, consider the following questions about each one’s provider network. Can you see the doctor(s) you want? Are referrals required to see specialists? Can you go to the hospital you want? Is the use of certain doctors or hospitals associated with reduced out-of-pocket costs? Contact the plan for more information about their doctors and hospitals.
If you’ll have to switch to a new in-network doctor with a certain MA Plan, there are some details to consider. Where are the doctors’ offices? What are their hours? Are they accepting new patients? If a senior travels extensively or lives in a different state for part of the year, will the plan provide adequate coverage? Many Medicare Advantage Plans only cover certain service areas, which can be very small. Therefore, an MA Plan may not be ideal for snowbirds or seniors who travel frequently.
- Prescription Drugs
Are the medications you take covered under the plan’s formulary (list of covered drugs)? What will your prescription drugs cost under the plan?
- Pharmacy Choice
Are there any restrictions on which pharmacies a beneficiary can use to fill covered prescription medications?
- Quality and Performance
Quality of care and performance varies among plans, doctors, hospitals and other health care providers. Medicare uses a five-star rating system to help beneficiaries choose the highest quality plan that meets their individual needs and budget. Be sure to look up the star rating of any MA Plans you are considering before making a decision.
Ask for Help Navigating Medicare
It’s important to gather all this information and carefully compare the benefits, drawbacks and costs as closely as possible. For assistance making decisions about health insurance coverage, contact your local Area Agency on Aging (AAA) to make an appointment with the State Health Insurance Assistance Program (SHIP). This is particularly important around the Annual Medicare Open Enrollment Period that runs from October 15 to December 7 each year. This is the time when Medicare beneficiaries may make changes to their MA Plans and Part D Plans.
The more you learn about your Medicare choices, the better prepared you will be to make the selection that is right for you. Visit AgingCare’s Area Agencies on Aging Directory to find more information, resources and health insurance counseling in your area.