It’s Open Enrollment, so expect to see endless advertisements about the free extra Medicare benefits you might be missing. Things like prescriptions, dental, vision, hearing aids, meals, gym memberships & transportation. But are the benefits actually free?
The answer is complicated. Like most things, there’s a trade-off. What these commercials are referring to are the extra benefits you receive with certain Medicare Advantage plans. In order to receive these “extras”, you need to sign up for a certain type of insurance.
Understanding Your Two Medicare Options
First, a little background. Once you’re on Medicare there are two different ways to fill in the gaps. You can either purchase a Medicare Supplement (also referred to as Medigap) or you can enroll in a Medicare Advantage plan. You can’t have both. It’s one or the other.
Medicare Supplements (like Plans F, G & N) are simply secondary payers. They fill in the most common gaps in Medicare, but don’t include much else. If you want/need prescription coverage, dental, vision or other benefits, you have to purchase those separately. Some Medicare Supplements will pay for a gym membership like Silver Sneakers, but that’s about it.
Medicare Advantage Plans (also referred to as Part C coverage) are more easily explained as replacement plans. They cover and replace your Medicare Parts A & B benefits privately and then fill in some of the gaps. These are private insurance plans from companies like Aetna, Anthem BCBS, UHC AARP, Humana, etc.
However, these policies are allowed to offer much more in the way of extra benefits. Many are provided at no additional cost. Some benefits, like comprehensive dental & vision insurance, can increase your monthly premiums, however.
The Extra Benefits Associated With Advantage Plans
The simple fact is Medicare Advantage insurance policies, per government rules, can offer many more perks than a Medicare Supplement plan. The list is comprehensive and growing. There’s nothing inherently wrong with this trend. Advantage plans serve many people very well.
Not all policies include everything below, but here’s a list of common benefits:
- Part D prescription drug coverage
- Dental care like routine cleanings and x-rays
- Vision care including eye exams & allowances for glasses
- Hearing exams and money towards hearing aids
- Free gym memberships, fitness classes and Silver Sneakers
- Telehealth appointments for $0
- Wellness & preventive care
- Post hospital discharge meals
- Nurse hotlines and disease management
- Quarterly allowances for over-the-counter items
- Diabetic supplies
- Transportation to doctor’s appointments
- Community based programs
- Monthly premiums of $0 with some policies
- A Medicare Medical Savings Account to cover costs
- Medicare Part B premium reduction & reimbursement
This isn’t an all-encompassing list. And you are not entitled to all of these benefits with every Advantage plan. Some policies are better in certain areas than others. And it helps to live in an area where several companies compete for your enrollment.
But should you choose an Advantage plan on the benefits alone? Probably not, but they are enticing. There’s more to the story…
What Are The Tradeoffs?
We understand the benefits listed above are attractive to consumers. They can provide significant savings throughout the year. So what’s the catch?
The main issue is you must enroll in a Medicare Advantage plan to get these benefits. It’s the only way. And these types of policies have some drawbacks of their own. First and foremost, most are private, network-driven, HMO & PPO plans. This means it’s prudent to stay in their network for your care. If you’re out of network for anything other than an emergency, you’re responsible for more, if not all, of the costs.
And Advantage plans have more out of pocket costs than most Medicare Supplements insurance policies. That’s okay for some consumers, but if you have health issues – or are anticipating future procedures – know that you’ll likely have higher cost-sharing.
It’s common to see many Advantage plans with a yearly in-network out-of-pocket maximum of around $4,000 for the year. Some are higher. And if you go out of network? It can be $10,000 or more with many PPO plans – or not covered at all with a HMO policy. These are the amounts you’re responsible for each year should they arise.
Thus, there are the two major issues: Networks and out of pocket costs. Again, most members don’t encounter serious problems here, but we talk with some that do. Sometimes their preferred doctor group or hospital won’t accept their plan – or later leaves the network. Other times, they’re running into big bills after a hospital stay or a procedure with significant after-care.
Can’t I Switch Back Later To A Medicare Supplement?
There’s the Open Enrollment window every year, right? Yes, every year from October 15th through December 7th.
This window does not necessarily allow you to jump from an Advantage plan to a Supplement, however.
The rules state you get 12 months to try an Advantage plan. After that time, you must pass medical underwriting to qualify for an enrollment into a Medicare Supplement. In other words, the insurance company offering the Supplement does not have to accept those with preexisting conditions or ongoing health issues. This can make it difficult to switch back and forth.
Why might you want to switch? Perhaps you’re having issues with their network of doctors and hospitals. Or maybe you’re running into significant of out of pocket costs year in and year out.
Contact Us to Learn More About Your Options
While it’s true there are several low-cost (and even $0 monthly premium) Medicare Advantage plans with desirable extra benefits, there are some strings attached. It’s a little misleading for commercials to say you’re entitled to these benefits, but our friend Joe Namath has to make a living too.
There’s a lot to know. Decisions you make now will determine your insurance options later. If you would like to learn more about Advantage plans with extra benefits in your area, contact us today. We’ll do a deep-dive and share with you all there is to consider during the Open Enrollment window.