Medicare Advantage (MA) plans are offered by private companies that are approved and contracted by Medicare. MA plans include all the benefits offered by Original Medicare plus extra benefits to support your total health. Seniors who need comprehensive coverage beyond the basic care provided by Original Medicare often turn to Medicare Advantage plans.
So, how does Medicare Advantage work? And how does it compare to Original Medicare? We're here to help you understand your plan options, costs and more.
Overview of Medicare Advantage Plans
To understand Medicare Advantage (Part C), it helps to start with Original Medicare, which includes Parts A and B. It’s a government-sponsored program that provides insurance for individuals 65 years of age and older and some younger people with disabilities. Part A covers inpatient hospital care, nursing facilities, hospice, and some home health care. Part B covers doctor appointments, outpatient care and some preventive services.
Medicare Advantage offers these same benefits as well as some additional ones. Some MA plans also come with prescription drug coverage (Part D). These are known as MAPD plans. There is also the option to join a standalone Prescription Drug Plan (PDP) separate from a Medicare Advantage plan.
In most Medicare Advantage plans, you need to use plan doctors, hospitals, and other providers, or you may pay more. You may be required to pay a monthly premium (in addition to your Part B premium) and a copayment or coinsurance for covered services.
Types of Medicare Advantage Plans
The wide variety of Medicare Advantage plans on the market means that seniors can choose a plan that is tailored to meet their needs, whether they are looking for more comprehensive coverage or lower costs. Let’s explore the different types of MA plans you may come across.
HMO Plans
HMO stands for health maintenance organization. An HMO plan offers lower costs compared to other types of plans, but coverage is limited to a defined network of providers. HMO members enjoy lower costs for care when receiving care from providers who are in the network, but may face higher costs for care received outside the network. If a member needs to see a specialist, a referral from a primary care provider (PCP) is required.
PPO Plans
PPO stands for preferred provider organization. PPO plans tend to have higher out-of-pocket costs than HMO plans. As its name suggests, PPO plans also have defined network of providers, but members have more flexibility to see providers outside the network. There is no referral required to see a specialist and members don’t need to choose a PCP.
Dual-Eligible Special Needs Plans (D-SNPs)
A D-SNP is a type of Special Needs plan that is available for low-income seniors and some people with disabilities who qualify for both Medicare and Medicaid. Benefits offered by these two programs are combined into a single plan to streamline care and provide additional support at little or no cost.
Chronic Condition Special Needs Plans (C-SNPs)
C-SNPs help manage conditions like diabetes, cardiovascular disease or congestive heart failure, among others, to reduce your health risks. These plans may target a single chronic condition or multiple conditions.
Benefits of Medicare Advantage
Additional Coverage
Because Medicare Advantage plans are managed by private companies, they can be customized with additional benefits, which may include:
- Routine dental care
- Vision care
- Hearing care and hearing aids
- Over-the-counter health items
- Fitness programs
- Telehealth online doctor visits
- 24-hour nurse line
Benefits vary by plan and market. Call or Click now to find out what's available in your area.
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Out-of-Pocket Cost Limits
Unlike Original Medicare, Medicare Advantage limits out-of-pocket costs. With a Medicare Advantage plan, once you’ve reached your out-of-pocket maximum, 100% of allowed healthcare costs are covered for the remainder of the year.
Inclusion of Prescription Drug Coverage (Part D)
While Part D plans can be purchased on their own, many Medicare Advantage plans include prescription drug coverage. These are known as MAPD plans. MAPD plans offer more predictable costs for your medicines, lower deductibles, or no cost for certain drugs.
Factors to Consider When Selecting a Plan
You’ll want to keep several factors in mind when shopping for your Medicare Advantage plan.
Costs: Consider your monthly budget and the plan’s insurance premiums, copays, and additional out-of-pocket costs. Find a balance between premiums and health needs to ensure you’re paying for the appropriate level of care without breaking your budget.
Coverage: Assess your health needs. If you feel you’ll need more comprehensive coverage for services like dental, vision, hearing care, consider plans that offer them. But remember, paying for these services might not be right for everyone every year.
Prescription drugs: Original Medicare does NOT cover prescription drugs. But just because a Medicare Advantage plan offers prescription drug coverage, that doesn’t mean your specific drugs are covered. Be sure to check the prescription drug formulary of the plans you’re considering to see if your drugs are covered—and find out how much they’ll cost.
Provider and hospital choice: Before you enroll in a plan, check to make sure its network includes the doctors you’d like to see, as well as your preferred local hospitals.
Costs Associated with Medicare Advantage
While shopping for a plan, you may see terms for costs you don’t understand. Knowing the difference between premiums, deductibles, and copays can help you save money on your overall out-of-pocket costs.
Premium: Your premium is the monthly cost you pay for your insurance and/or prescription drug coverage. Similar to a subscription, you pay your premium so you have coverage when you need it.
Deductible: A deductible is the amount you must pay out of pocket before your policy starts to pay for covered expenses. Monthly premium payments do not count toward your deductible.
Copayments: Your copay (or copayment) is the fixed fee you’ll pay when you visit your medical provider or get a prescription.
Understanding the Total Cost of Ownership
A plan’s value is about much more than monthly premiums and can include important extra benefits. You should be asking: Is there a maximum out-of-pocket limit? Does the plan offer an allowance for over-the-counter health items? Does it have the supplemental benefits you need? Having access to the benefits you need can greatly increase the plan’s value.
Medicare Advantage Eligibility Requirements
An individual must be enrolled in Original Medicare to be eligible for Medicare Advantage. They must also live in the plan’s service area.
Medicare Advantage Enrollment Periods and Deadlines
Medicare Advantage plans have annual enrollment periods and deadlines. Plan ahead to ensure you don’t miss your chance to sign up.
Initial Enrollment Period (IEP): You become eligible to enroll into a Medicare Advantage plan three months before you get Medicare and that enrollment period ends three months after you get Medicare. Your coverage would start the same day as your Medicare starts if you enroll before your Medicare starts, or the first of the month after the plan gets your enrollment request if enrolling after your Medicare starts.
Annual Enrollment Period (AEP): The Annual Election Period occurs from Oct. 15 through Dec. 7. This is also referred to as the “Fall Open Enrollment.” Health plan coverage begins on Jan. 1 of the following year.
Medicare Advantage Open Enrollment Period (MA OEP): Medicare Advantage Open Enrollment is from Jan. 1 to Mar. 31. During this time, if you are already enrolled in a Medicare Advantage plan, you can join a plan, switch to another plan, or drop your plan and return to Original Medicare. You can also add or drop Part D coverage.
Special Enrollment Period (SEP): You may qualify to make plan changes based on special circumstances (e.g., you move, a natural disaster occurs in your area, you are diagnosed with specific chronic conditions, you qualify for or lose eligibility for Medicaid). A Special Enrollment period will open if you’ve moved to a new address, lost or changed insurance coverage, qualified for Medicaid, or experienced other unique circumstances. As of Jan, 1 2024, you have two months to enroll in a plan during a Special Enrollment period.
To learn more, contact us and speak with our experts to learn more about coverage options and find a plan that’s right for you.
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Disclaimers
Sources
Medicare.gov: Joining a Plan
