What is Medicare Advantage?
In this article, we look at what is Medicare Advantage (aka Medicare Part C). As we discussed in our Medicare 101 Post, there are two different Medicare paths. You will choose one when you are setting up your health care in retirement.
- Path One = Original Medicare, Part A and Part B, with a stand alone Prescription Drug Plan (Part D) and an optional Medigap (Medicare Supplement) Plan.
- Path Two = Medicare Advantage (Part C) that replaces Medicare Part A and Part B and typcially includes a Part D Drug Plan. These plans are offered by private insurance companies that you work with directly.
The Basics of Medicare Advantage
Medicare Advantage “bundled” plans are offered by private insurance companies (carriers). You use them IN PLACE of Original Medicare, but they are still Medicare. Moreover, they must include all the same Medicare services covered by Part A (hospital) and Part B (medical). In addition, almost of them include Part D (prescription drugs).
You will hear/see these plans referred to as MA plans, and MAPD plans when they include prescription drugs.
What is the Advantage to Choosing a MA or MAPD plan?
The first advantage to these plans is that many of them have lower out-of-pocket costs than Original Medicare. Secondly, they often have extra benefits such as dental, vision or hearing that is not included in Medicare.
What are the Costs of a MA / MAPD Plan?
First, remember that most people have Medicare Part A “premium free”. (See this page on the medicare.gov website if you are wondering if you are in the “most people” category.) Second, remember that most people also pay a monthly premium for Part B. However, some Medicare Advantage plans will pay all or part of your Part B premium.
There may be many (or just a few) different MA and MAPD plans available in your area. They will all be set up differently and cost different prices from carrier to carrier. We suggest finding an independent insurance agent/broker that can compare different plans, carriers (insurance companies) and prices. They will help you pick a plan that fits your lifestyle and financial needs. Please note, there are often plans out there that have low or even $0 monthly premiums.
In addition to whether or not you pay a monthly premium with a MAPD plan, each plan will have a different set up for out-of-pocket costs:
- Some plans have a yearly deductible.
- Other plans have co-pays for office visits.
- Some plans have out-of-network costs
- And some plans have yearly max out-of-pocket limits.
See this medicare.gov page for more info on MA costs.
You will need to decide what plans fit well with your monthly cash flow situation in addition to how often you need medical products and services.
How do MA and MAPD Plans Work?
Insurance companies usually set-up Medicare Advantage programs as a PPO or HMO networks. You might be familiar with this style of network plan insurance if you had (have) one from an employer or even from the open marketplace.
Typically, you will need to use doctors in your MA plans network. (Unless it is an emergency, or unless you are willing to pay extra to go “out-of-network”). If you have providers you want to keep, ask them if they are part of a network you are considering. In some MA/MAPD plans, you may also need referrals to see specialists. These are all plan specific requirements. You will need to look all these requirements prior to making your MA decisions.
HMO and PPO plans have much more robust networks now than plans from the past. Most people can find a plan that is large enough/flexible enough to work with their lifestyle. This is true even if they travel frequently in retirement. I recommend talking to a licensed agent to make sure you understand how the plans work.
When Can You Sign-up for a Medicare Advantage Plan?
If you are a US citizen with both Part A and Part B Medicare coverage, you can join MA plans in your area during these times:
- During your Initial Enrollment Period (IEP): Just like joining Original Medicare, you can join a MA plan during the 7 month period (3 months before the effective date of Medicare Part A and B, including the month Medicare begins, and then 3 months after) of time that you are turning 65.
- During a Special Enrollment Period (SEP): There are special circumstances that give you the opportunity to enroll in a MA/MAPD plan. These include (but are not limited to) moving to a new county, losing group health (like from an employer), or managing a chronic illness. To learn more about SEP’s and their time frames, please visit this page on the government’s website.
- During the Annual Enrollment Period (AEP): October 15th to December 7th, is when you have the opportunity each year to join an MA/MAPD plan. Your new coverage will begin January 1st.
*OEP – As of 2019, if you are already in a Medicare Advanage plan, you can also change plans during AEP, or you can switch plans once (or switch back to Original Medicare) during Open Enrollment Period – January 1st to March 31st.
Other things the US Government would like you to know about MA Plans:
- Emergency and Urgent Care is always covered with MA plans.
- MA plans cover all Original Medicare Services and carriers must follow all Medicare rules.
- MA plans may have extra benefits like vision, health, dental and other fitness/wellness programs.
- You can join a MA plan with pre-existing conditions (except for ESRD, which is a special case and has other options).
Who can Help You with a Medicare Advantage Policy?
Just like a supplement, you can compare these plans online, but I suggest you talk to a professional, independent insurance broker that can help you compare plans. It won’t cost you any more money to use a professional, and Medicare Advantage Plans can be overwhelming when you are trying to pick one, especially if there are many offered in your area.
Remember, independent agents work for you (not the carriers), and having an actual person to help you in communicating to insurance carriers and keeping you updated each year is very valuable. This is something you do not get if you sign-up directly with a company online.