Medicare Advantage plans
There are pros and cons to consider As you approach 65, you’ll start receiving dozens of advertisements for “Medicare Advantage” plans in the mail from private commercial healthcare providers such as HMOs. What do these programs offer, and do they give you an “advantage?”
Medicare Advantage Plan
A Medicare Advantage plan (sometimes called “Medicare Part C”) is a type of health insurance offered by a private company that contracts with the federal government’s Medicare program to provide all Medicare participants with Medicare Part A (inpatient/hospital coverage) and B Part (outpatient/medical insurance). In addition to all services covered by Original Medicare, most Medicare Advantage plans also include prescription drug coverage.
Medicare Advantage plans are typically offered by Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), Private Fee Services Plans, Special Needs Plans, and Medicare Medisave Account plans.
Most Medicare Advantage plans offer prescription drug coverage in addition to all services covered by Original Medicare.
On average, about 30 percent of all 555,000 Medicare participants opted for Medicare Advantage.
Plus, Medicare Advantage plans offer participants simplicity, financial protection, and extra services.
- All-in-one coverage: Most Medicare Advantage plans offer prescription drug coverage at no additional cost compared to traditional Medicare, under which participants must purchase a separate drug plan (Medicare Part D) for $10 per month Additional premiums up to $100.
- Reduced out-of-pocket costs: The total out-of-pocket costs for covered services are limited in a Medicare Advantage plan – once the annual cap is reached, the plan will pay for the full amount of medical services you allow. Also, by enrolling in a Medicare Advantage plan, you can save money by forgoing “Medigap” (if you have the plan) – supplemental insurance plans that cover some costs, such as co-payments or care outside the United States. Some Medicare Advantage plans also help participants pay their monthly health insurance premiums.
Depending on the specific plan, there may be some components of the Medicare Advantage plan that may not appeal to participants.
- Limited choice of providers: People in Medicare Advantage plans often have to choose their doctors and hospitals from a specific provider network, and out-of-network services can be costly. However, research shows that information about provider networks can change frequently, making it difficult to know who is on the network. Many Medicare Advantage plan providers mail updated lists of health care professionals and facilities included in their network. While the Centers for Medicare Services (CMS) now requires Medicare Advantage plans to notify participants when they substantially reduce the size of their provider network, the law allows plan providers to define “significant” themselves.
- Limited flexibility: Medicare Advantage plans allow a 6-month period in which new participants can drop the plan and return to traditional Medicare. After six months, participants can only transfer once a year during the Medicare open enrollment period from October 15 to December 7.
- Additional premiums: Some Medicare Advantage plans require participants to pay an additional monthly premium in addition to their health insurance premiums.
how do you decide
If you are eligible for Medicare or already have traditional health insurance and considering Medicare Advantage options, you should take a close look at the pros and cons of traditional health insurance and the various Medicare Advantage plans.
It’s possible to have multiple Medicare Advantage plans available in your area, each with varying costs, benefits, and quality. Most Medicare Advantage plan providers have websites with complete information and contact phone numbers. Many even allow you to register online.
To find a Medicare Advantage plan in your area, you can use CMS’ online Medicare Plan Finder.
Medicare also provides resources to help you decide, such as the CMS ‘Handbook Medicare & You’ and a list of state health insurance advisors you can contact for more information. You can also call Medicare directly at 1-800-MEDICARE (1-800-633-4227).
If you decide to enroll in a Medicare Advantage plan:
- Visit the program’s website to see if you can enroll online; or
- Complete the program registration form. Contact the program to obtain a registration form, complete and return to the program. This option is required for all plans.
When you enroll in a Medicare Advantage plan, you must provide your Medicare number and the date your Part A and/or Part B coverage began. This information is on your Medicare card. If you lose your Medicare card, you can ask for a replacement.
Beware of Identity Theft
Remember, your Medicare number includes your Social Security number, making it a great prize for identity thieves. Therefore, never give it or any other personal information to Medicare plan callers.
Medicare Advantage plans do not allow you to call unless you specifically request to be contacted by phone. Also, Medicare Advantage plans should not ask for your financial information, including credit card or bank account numbers, over the phone.