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How to Choose Medicare vs. Medicare Advantage Plans – What to Know

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When it comes to Medicare and Medicare Advantages plans, all of them are not equal. And this becomes confusing for seniors who just want the necessary coverage to see doctors and maintain their overall well-being. Each year, the possibilities change and evolve during the open enrollment period. So how do you know what to choose? Seniors need to research the differences, dive into the details, learn about out-of-pocket costs, and evaluate the networks. What works for one person might not for another – and this can change each year.

medicare advantage plansMedicare vs. Medicare Advantage

Medicare is provided by the government and Medicare Advantage is offered by private insurance companies. Medicare Advantage gives seniors the same type of coverage provided by Medicare, but it does so through a private insurance companies like Aetna, Humana, Cigna, United Healthcare and others.

The coverage is the same and provides services from physicians, hospitals, home health care agencies, laboratories, etc. About 90 percent of these plans offer drug coverage.

Medicare Advantage plans usually have a small premium due each month, but some can be found for $0. Comparisons of the benefits and costs will reveal which choice is better so the insured can get the most comprehensive coverage at the lowest cost.

The Medicare Advantage Alternative

Medicare Advantage is an alternative to Medicare. The plans are mostly PPOs (preferred provider organizations) and HMOs (health maintenance organizations). Your options will depend on what’s offered in the county where you reside.  Recognized names offering Medicare Advantage plans include Humana, Aetna, United Healthcare, Anthem, Blue Cross and Blue Shield, WellCare, Cigna, Kaiser Permanente, and others.

These plans must provide the same benefits offered by Medicare, but all take a step further by limiting the insured’s out of pocket exposure. And keep in mind, you must be enrolled in Medicare Part A and Medicare Part B to qualify for a Medicare Advantage plan. You must still pay your Medicare Part B premiums even if you choose to enroll in an Advantage plan. But you are allowing a private insurance company to insure you for what Medicare normally would. In turn, you’ll want to use their networks of doctors and hospitals to realize the most cost savings.

Benefits of Medicare Advantage

Ultimately consumers must select the right insurance plan for his or her unique needs. With Medicare Advantage plans, there is a cap on out-of-pocket costs. That’s not the case with traditional Medicare unless a supplement like Plan F, G or N is purchased. Advantage plans are all in one coverage offered at a reasonable price. Since most include Part D drug coverage, there is no additional insurance plans to buy.

And extra benefits are offered that do not come with Medicare, such as dental exams, vision care, and hearing exams. In 2019, even more benefits will be offered like some long term care benefits, caregiver services, meals and much more. The government is incentivizing the enrollment in Advantage plans like never before.

Furthermore, many now offer networks that can be accessed across the country. That was a problem in years past, but the larger insurance companies have PPO options with access to care in most large metropolitan areas. This alleviates a major concern for those who have homes in multiple states and those who simply like to travel.

Concerns With Medicare Advantage

Along with the benefits come some concerns. Access to services is limited to doctors and hospitals in the plan’s network. Consumers must verify their preferred providers are in their plan. This is especially true of HMO plans. With an HMO you pay the full cost of care if you go out of the network – unless it’s deemed an emergency. And referrals from a primary care physician might be required to see a specialist.

With a few exceptions, most people are locked into the Medicare Advantage plan they choose for a year. You can always return to Original Medicare during the Annual Election Period each fall, but you may not qualify for a Medicare supplement policy. Once you’ve been in an Advantage plan for longer than one year, most Supplemental companies are allowed to medically underwrite you. In other words, you can be turned down for coverage if you’re in poor health.

And even though your out of pocket costs are capped with an Advantage plan, those caps are still much higher than with Supplement like Plans F, G, or N. So you’ll need to stay in network and know that a major health event can still cost you thousands with this type of coverage.

What to Think About

Before making a final decision, find out what providers are in the Medicare Advantage network. This is particularly important for people in rural areas who might get limited services or have to travel long distances for medical care and treatment. Determine if medications are covered by the plan. Find out if buying into the plan will limit your ability to get Medicare supplemental insurance in the future if you opt for Medicare. Be aware of the claims process, out-of-pocket expenses, and referral policy. Make sure the plan provides the exact coverage you need and makes it convenient to visit your treating physicians.

Work with a licensed insurance agent who understands all the differences in these policies. An agent can help you do the necessary shopping around and comparisons to get the best plan for your situation.

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Category: Medicare Advantage

Last updated on July 19th, 2018