Understanding Medicare Advantage Insurance

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When you’re new to Medicare, there are decisions to make. Most of our clients compare traditional supplements (Plans, F, G, N, etc.) to Advantage plans, but inevitably the questions arises, ‘What is a Medicare Advantage (MA) plan?’

Through the years, we have found there’s a lot confusion about Advantage plans. They are different from supplements – and it’s important to understand how. We answer several of the most common questions below so you will have a better understanding of what to expect from this type of insurance.

Simply Put, What Is a Medicare Advantage Plan?

CMS (Centers for Medicare and Medicaid Services) defines Medicare Advantage plans as, “a type of Medicare health plan offered by a private company that contracts with Medicare to provide you with all your Part A and Part B benefits.”

In other words, you are allowing a private insurance company (like Aetna, Humana or United Healthcare) to cover all of your normal Part A & B benefits instead of Original Medicare that is provided by the government. You still pay your Medicare Part B premiums each month, but your A & B benefits are covered privately from a chosen insurance company.

Medicare A & B Has Gaps. Do Medicare Advantage Plans Fill These Gaps?

Yes and no. There are several gaps associated with Original Medicare (Parts A & B) including deductibles, coinsurance, etc. That’s why consumers usually purchase supplemental insurance of some kind.

Advantage plans reduce these gaps so your out-of-pocket exposure is reduced. They do not eliminate all of the Part A & B gaps however. All MA plans detail their out of pocket exposure – both in and out of network. There are yearly maximums that limit the total amount the insured might face if healthcare is needed.

You will know upfront what a doctor’s office, ER or Urgent Care visit will cost as well as an extended hospital stay. All of these amounts will be carefully detailed in the Summary of Benefits and Evidence of Coverage documents provided by the insurance company.

Are There Different Types Of Advantage Plans To Choose From?

Yes, there are HMO, PPO, PFFS, Medical Savings Account, Cost Plans, Special Needs Plans and more. The two most common types are HMO (Health Maintenance Organization) and PPO (Preferred Provider Organization) plans. Of the two, typically PPO plans have larger networks of doctors and hospitals to choose from.

Plan availability will differ from state to state and county to county. Your neighbors on the other side of the street may have access to different plans if they live in a different county than you.

It Sounds Like MA Plans Can Vary – Is There An Easy Way To Compare Them?

Yes, you can go to Medicare.gov and use their Plan Finder software. It will return all of the available MA plans in your county. You can enroll in an MA plan direct from the provider or through an insurance agent. The monthly cost (if there is one) will be the same no matter your source.

If you are not sure which plans might be best for you, then speaking to a licensed independent agent can be wise. We can help you compare and contrast your options in order to find the most suitable plans to fit for your needs.

What About Networks And/Or Network Restrictions?

Most (not all) Advantage plans use a network of doctors and hospitals to provide care. This is how they keep costs down. If you enroll in a Humana HMO plan, then you will need to use the Humana doctors and approved medical facilities for your care. You do not need to stay in-network for emergency care, however.

With most MA plans, you will need to choose a Primary Care Physician. This is different than if you stayed on Original Medicare and instead purchased a supplement – like Plan F, G or N. With almost all supplements, you can see any doctor who accepts Original Medicare.

In most cases, you may have a smaller network of medical providers with a Medicare Advantage plan. This is not an issue for many members – it’s just something to be aware of. Most doctors accept many different types of MA insurance plans from different providers.

Is Prescription Part D Drug Insurance Included?

Yes, most Medicare Advantage plans include prescription Part D insurance, but not all. And if your plan of choice does not include Part D coverage, you may not be able to enroll in one without cancelling your Advantage plan.

So it can be a little complicated – and it’s different than how Medicare supplements and Stand Alone Part D plans can be paired together. This is another instance when you may want to talk with a knowledgeable agent to make sure you’re aware of the rules and regulations with Medigap plans.

(Typically plans that do not include Part D drug coverage are designed for those who have prescription drug coverage elsewhere – like the VA.)

Are There Extra Benefits With Advantage Plans Like Dental, Vision & Hearing?

Yes, and this another area where they differ form Medicare supplement insurance. Advantage providers are allowed to bundle dental/vision/hearing packages if they wish. Some do and some don’t. Undoubtedly, it’s nice to get these extra benefits – especially if your MA premiums are low.

In this way, MA plans can be a total package if they include Part D drug coverage, dental, vision and hearing. Plans with these types of extra coverage may cost a little more however than plans without.

How Much Do MA Plans Cost? Why Do Many Plans Have No Monthly Premiums?

MA come in different shapes and sizes and will vary in cost. In most counties, there are a few plans offered for $0 a month. More robust and comprehensive plans can cost upwards of $150 a month. PPO plans typically cost more than HMO plans. A good rule of thumb is: the more expensive the plan, the better the network and the more comprehensive the coverage.

We are often asked about $0 premium plans and how they can exist. The primary reason is the federal government subsidizes these plans. They pay the insurance company a certain amount per member. Additionally, these plans may have a smaller network of doctors and hospitals that have agreed to set reimbursements from the insurance company. Those two factors allow for $0 Medicare Advantage plans.

I’m On Medicaid. Can I Still Enroll In a Medicare Advantage Plan?

Yes, you can. This can be a little complicated so it’s best to speak with your local Medicaid official as well as an agent before doing both. But many Medicaid eligible beneficiaries do choose to enroll in an Advantage plan while also maintaining their Medicaid eligibility.

Can I Enroll In Both A Medicare Supplement & Advantage Plan?

No. There’s not too much else to say. It’s one or the other and there are no circumstances where you can enroll in both. In some cases, you can enroll in both an Advantage and a separate Part D drug plan, but never a supplement like Plan F, G, N, etc.

Which Insurance Is Better – Medicare Supplements or Advantage Plans?

That’s the million dollar question. The answer: It varies from person to person. Typically Medicare supplements are more expensive, but they are also more comprehensive and usually don’t have network restrictions. And supplements are more portable for those who travel frequently or winter/summer in different states.

Conversely, Medicare Advantage plans can be less expensive and also bundle Rx, dental, vision and hearing. If your doctors accept your chosen insurance plan, then you need not worry about networks quite as much. For those under age 65, Advantage plans can be one of your only options. There’s not a right or wrong answer so long as you know the ins and outs of the two different options.

Are There Pitfalls/Concerns With Medicare Advantage Plans?

There can be. As an agent, the ones I hear about most are network issues. Extended care/rehab facilities are somewhat notorious for not accepting certain MA plans. And sometimes well-regarded hospitals like the Mayo Clinic are very selective in what they will accept. Additionally, the out-of-pocket costs can add up over time.

The other pitfall is that you only get a one year free-look with any Medicare Advantage plan. After one year, you can return to Original Medicare and purchase a guaranteed issue Medicare supplement (like Plan F) for the first time or re-enroll in a supplement with your old provider. After two years or more, supplemental providers are allowed to medically underwrite and decline coverage. There is no open enrollment window to purchase a supplement if you don’t like your Advantage plan.

What is The Annual Election Period – How Does It Affect MA Plans?

The Annual Election Period (AEP) occurs from October 15th through December 7th each year. Unless you are experiencing a special enrollment period (SEP), this is the only time of year when you can change Medicare Advantage plans.

If you are already enrolled in a MA plan, you can switch to another one. Conversely, you can disenroll from your Advantage plan, rejoin Original Medicare and apply for a Medicare supplement plan, but medical underwriting may be required to enroll in a supplement. There is no underwriting to enroll in a Part D drug plan however.

Are There Special Enrollment and Disenrollment Periods? What is a SEP?

The Medicare Advantage Disenrollment Period runs from January 1 through February 14th. During this window of time, you can disenroll from your MA plan, rejoin Original Medicare and purchase a Part D plan – no questions asked. The only other times to leave an MA plan are during the aforementioned AEP window or if you’re granted a Special Election Period.

SEP’s (Special Election Periods) are somewhat common and can occur when an insurance company discontinues your MA plan, when you leave their service area or when Medicare rates them as poor performing plans – to name a few. If you’re granted a SEP, then you want to explore all of your options right away.

Contact Us To Compare Medicare Advantage Plans

It goes without saying that there is a lot to think about when it comes to Advantage plans. We are here to help. We’ve been working with these policies for several years and in several states. If you would like to know more about your options, please feel free to contact us.

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Category: Medicare Advantage