Medicare doesn’t cover everything so it’s wise to enroll in additional coverage. In our second part series, we discuss three reasons why you may want to choose a Medicare Advantage plan over a Supplement. (View Part One Here.)
There’s not always a right or wrong way to fill in the gaps, but in this post we’ll make an argument for Advantage plans. Many of our clients choose this option for a variety of reasons, but we’ll discuss the most common reasons below. We’ll also explain what to watch out for.
Background On Medicare Advantage
What are they? These are private insurance plans that, to some extent, replace government provided Original Medicare. In other words, you’re turning your Medicare A & B coverage over to a private insurance company like, Aetna, Humana, Cigna or United Healthcare. There are also many smaller regional companies across the country offering Advantage policies as well.
Most plans are HMOs and PPOs, but you will also see PFFS, MSA and Cost plans available too. Usually these plans have networks of doctors and hospitals you’ll want to use for routine care in order to keep your costs lower. Going out of network can cost you more – ore in some cases – not be covered at all.
You can’t have both a Medicare Supplement and an Advantage plan. It’s one or the other. Either you keep your Original A & B benefits from the government and pair it with a Supplement – or turn your coverage over to a private insurance company who will insure your government benefits and more.
1) Most MAPD Plans Offer All In One Coverage
Many of our clients like the convenience of Medicare Advantage Prescription Drug plans. These all-in-one policies privately cover everything provided by Original Medicare (Parts A & B) while also including Part D Drug coverage. They close all gaps in Medicare so you know exactly what your maximum out-of-pocket exposure will be for the year.
You’ll typically have copays, coinsurance and deductibles, but so long as you don’t have a significant health event, your out-of-pocket costs should be minimal each year. And the network of providers with Advantage plans are fairly robust in most areas. Many policies provide concierge services when you travel and will help you find doctors and hospitals in your area if needed. This is helpful for those who travel extensively and/or own multiple homes.
2) Extra Benefits At No Additional Cost
Medicare Advantage plans have more flexibility in the benefits they can offer. We have to be a little careful as Medicare does not want consumers to buy these plans for the extras alone. They are nice to have, but not usually the best reason to choose an Advantage plan over a Supplement.
That being said, many policies will include basic dental and vision coverage at no additional cost. Oftentimes, you can buy-up if you want more comprehensive dental and vision coverage – some benefits available without waiting periods. Other plans will include transportation services to and from doctor’s appointments – and free home meal delivery if you’re recovering from an ailment or procedure. Still others can provide quarterly funds toward over-the-counter items that monitor or improve health.
But the benefit we’re asked about most often is Silver Sneakers. The good news is almost all Medicare Advantage plans include a free Silver Sneakers gym membership with your policy. That’s a big help for those who enjoy going to the gym, but don’t want to pay a monthly membership fee.
3) Low To No Cost $0 Medicare Advantage Plans
The cost of the insurance policy itself is a very important factor for most of our clients. Medicare Advantage plans are popular because they can be found for under $50 a month in a lot of areas. In fact, you’ll see many HMO, PPO and MSA plans offered for $0 a month.
Having no monthly premiums does not necessarily make Advantage plans inferior, but there are some risks. Zero cost plans can have more out-of-pocket exposure to the insured, smaller provider networks, and/or less comprehensive drug coverage. You’ll want to review all of these items with your broker. We have many clients who get along just fine with $0 policies, however.
The bigger risk is if you have a significant medical event. Most Advantage policies will have somewhere in the neighborhood of $3,500-$10,000 in out-of-pocket exposure depending on whether you are in – or out of network. This would be for something like a major surgery or prolonged hospital stay. Otherwise it would be hard to reach those maximums.
And remember, you still have to pay your Medicare Part B premiums to the government no matter what. So even though your Medicare Advantage plan is free, you still pay the government. Your Part B premiums are unavoidable, but some plans offer Part B premium reductions to those who qualify.
Are Medical Savings Accounts A Good Option?
Okay we said only three reasons to consider Advantage plans, but Medical Savings Accounts (MSA) deserve a subheading here. These innovative Medicare Advantage plans offer a great way to save money while also accounting for future health expenses.
MSAs are $0 high deductible health plans that contribute approximately $3,200 each year into the owner’s account. The deposit can be used to pay the deductible which will range be in the range of $7,500 to $9,500 depending on where you live. If you’re in good health, you can cover your deductible after a two or three years of deposits.
There are no networks to worry about with Medical Savings Accounts and your balance rolls over each year. It always belongs to you. MSAs do not cover Part D drug insurance, however. Medicare Drug plans will need to be purchased separately when enrolling in an MSA.
Contact Us To Learn More About Your Insurance Options
We are a full-service, independent insurance brokerage specializing in Medicare Advantage, Supplements and Part D Drug policies. We’re licensed direct with dozens of providers across the country and can help you compare the options that best meet your needs and budget. Contact us today!