Medicare Advantage
Medicare Part C, also known as Medicare Advantage, is a type of Medicare health insurance plan offered by private insurance companies that contract with the federal government.
What is Medicare Advantage?
These plans must provide all the benefits of Original Medicare (Part A and Part B) but may also offer additional benefits such as vision, hearing, dental, and wellness programs. Many Medicare Advantage plans also include prescription drug coverage (Part D).
Medicare Advantage plans may have different costs and rules than Original Medicare, and typically require beneficiaries to use a network of healthcare providers. However, they may also offer lower out-of-pocket costs and more coordinated care.
Medicare Advantage plans available
Average monthly premium (2023
Types of Medicare Advantage Plans
Health Maintenance Organizations (HMOs):
These plans typically require you to choose a primary care doctor and get referrals to see specialists. You may also be required to use healthcare providers within the plan's network, except in emergencies.
Preferred Provider Organizations (PPOs):
These plans typically allow you to see any healthcare provider, but you'll pay less if you use providers within the plan's network. You may also need a referral to see a specialist.
Private Fee-for-Service (PFFS) plans:
These plans allow you to see any healthcare provider that accepts the plan's payment terms and conditions. However, not all healthcare providers accept PFFS plans.
Special Needs Plans (SNPs):Precise Result
These plans are designed for people with specific health conditions or characteristics, such as chronic conditions, low income, or living in an institution.
Medicare Medical Savings Account (MSA) plans:
These plans combine a high-deductible health plan with a medical savings account. The plan deposits money into your account each year, which you can use to pay for healthcare expenses.
Who is eligible to enroll?
You are eligible to enroll in an MA Plan if you have Medicare Parts A and B and reside in the plan’s service area. Most Medicare Advantage Plans provide prescription drug coverage (Part D), but if you enroll in an MSA plan or a PFFS plan without drug coverage, you may enroll in a stand-alone Part D plan. Those with Original Medicare who desire Part D coverage must also join a stand-alone Part D plan.
If you receive health coverage from your employer or union when you become eligible for Medicare, they may automatically enroll you in an MA Plan sponsored by them. You may choose to continue with this plan, switch to Original Medicare, or sign up for a different MA Plan. However, keep in mind that changing your coverage could result in your employer or union reducing or terminating your health benefits, as well as the benefits of your dependents and other benefits you receive from your company. Before making any changes, speak with your employer/union and plan to understand how your health benefits and other benefits may be impacted.
Medicare Advantage costs and coverage
When selecting a Medicare Advantage Plan, it’s important to be aware of the various cost-sharing arrangements you may encounter. Costs in MA Plans are often distinct from those in Original Medicare and may have additional regulations. Therefore, carefully evaluate each plan before enrolling.
Here are the different cost-sharing aspects to consider:
- Premiums: A Medicare Advantage plan costs $33 per month on average, but a wide variety of options are available, ranging from $0 to more than $300 per month. To join a Medicare Advantage plan, you must already be enrolled in both Medicare Parts A and B. It’s important to note that Part B has a separate premium that you must pay even if you enroll in a Medicare Advantage plan. In 2023, the standard Part B premium is $164.90 per month. However, you may have to pay a higher premium if you delayed enrolling in Part B and have a penalty, have a higher income, or have less than 40 Social Security work credits.
- Deductible: The deductible is the initial amount that an individual must pay from their own pocket before receiving any benefits. While not all Medicare Advantage plans have an annual deductible, some plans may require it. Additionally, certain Medicare Advantage plans that provide prescription drug coverage may require a separate deductible for drug coverage.
- Copayment: Cost-sharing refers to the portion of costs paid by the patient for covered drugs or services such as doctor visits. Copayments are usually a fixed dollar amount, while coinsurance is a percentage of the total cost of the item or service. Medicare Advantage plans may charge different amounts for copays and coinsurance, and these amounts may vary depending on whether the provider is in or out of the plan’s network. For example, if the coinsurance is 25%, the patient is responsible for 25% of the cost, while the plan covers the remaining 75%.
- Maximum out-of-pocket (MOOP) limit: The costs that you will be responsible for paying out of pocket, including premiums, deductibles, and copayments, differ between Medicare Advantage plans and may change annually. However, all plans have a maximum out-of-pocket spending limit, which remains the same. In 2023, this limit is set at $8,300.
For plans that permit you to see providers who are not in-network, the out-of-pocket maximum may be higher. Additionally, if your Medicare Advantage plan provides coverage for prescription drugs, a separate out-of-pocket maximum will apply to your prescription drug expenses.
Furthermore, keep in mind that MA Plans have various coverage regulations. Many plans only cover services if you receive them from doctors, hospitals, and pharmacies that are in the plan’s network. Before joining an MA Plan, ensure that your doctors (or other providers you may need in the future) are in-network and accepting new patients from the plan. However, it’s essential to note that doctors and hospitals can leave the plan at any time, and you can only exit an MA Plan during an enrollment period to avoid incurring a penalty.
Although MA Plans must cover the same health services as Original Medicare, they may ask you to pay more for specific services or demand that you take certain steps before they will pay for your care. For instance, a plan may require your provider to obtain the plan’s permission before providing you with specific services or require more formal referrals to see specialists or prior authorization for certain services.
Lastly, it’s important to remember that you cannot buy a Medigap policy to supplement an MA Plan and cover cost-sharing. Medigap policies only work with Original Medicare.
Medicare Advantage enrollment
Enrolling in a Medicare Advantage Plan is restricted to specific periods throughout the year. It is recommended to enroll in a plan by calling 1-800-MEDICARE, rather than contacting the new plan directly. To enroll in an MA Plan, you need to be enrolled in Medicare Parts A and B. The following enrollment periods are available:
Initial Enrollment Period (IEP): A seven-month period that includes three months before and after the month you first become eligible for Medicare (either during your 65th birth month or the 25th month you have collected disability benefits).
Part B Special Enrollment Period (SEP) for losing job-based insurance: If you were covered by job-based insurance when you first became eligible for Medicare, this Part B SEP allows you to delay enrollment in Part B without penalty. You can enroll in Medicare without penalty for up to eight months after losing job-based coverage. You can then enroll in an MA Plan.
Part B SEPs for exceptional circumstances: SEPs are available for unusual situations such as living in a natural disaster or emergency area. Once you have signed up for Parts A and B coverage, you can enroll in an MA Plan.
General Enrollment Period (GEP): This is a period from January to March each year when you can enroll in Medicare if you did not sign up for it when first eligible. Coverage starts the first of the month following enrollment. After you have signed up for Parts A and B coverage, you can enroll in an MA Plan. You should enroll in a plan during the same month you sign up for Parts A and B.
Fall Open Enrollment Period: This period runs from October 15 to December 7 each year, during which you can make changes to your Medicare coverage. You can select a new MA Plan or switch between Original Medicare and Medicare Advantage. You can also change your Part D coverage during this time.
Learn more about Medicare Enrollment Periods here.
Frequently Asked Questions
Are all Medicare Advantage Plans the same? No, there are many different types of Medicare Advantage Plans with different costs, networks, and coverage rules.
Can I enroll in a Medicare Advantage Plan if I have pre-existing conditions? Yes, MA Plans cannot deny you coverage based on pre-existing conditions.
Can I switch from one Medicare Advantage Plan to another? Yes, you can switch to a different MA Plan or back to Original Medicare during certain enrollment periods.
The Bottom Line
Medicare Advantage Plans can be a good option for people who want additional benefits beyond what Original Medicare offers. However, it’s important to carefully consider the costs, coverage rules, and network of each plan before enrolling. Make sure to review the plan’s formulary to ensure that your current prescriptions are covered, and check that your preferred healthcare providers are in the plan’s network.
If you have questions or need help enrolling, give us a call. Our assistance is at no cost to you.