How do Medicare Advantage Plans work?
Health Insurance Companies contract with Medicare to provide your Original Medicare Benefits. You must be enrolled in both parts A and B of Medicare and you’ll continue to pay your part B premium in addition to any Medicare Advantage Premium.
What do Medicare Advantage Plans cover?
KEY FACT: Even if you choose a Medicare Advantage plan you’ll still have all the protection offered by Original Medicare.
Medicare Advantage plans provide coverage equal to Part A and Part B of Original Medicare, however, your hospice care will stay covered through Original Medicare Part A even you if you enroll in a Medicare Advantage Plan. In addition to providing the same coverage as Original Medicare, a Medicare Advantage plan may provide additional benefits such as dental and vision care. Most Medicare Advantage Plans also provide coverage for prescription drugs (Medicare Part D). If you choose a Medicare Advantage plan with Prescription Drug coverage you will not need to buy an additional Part D plan.
There are several types of Medicare Advantage plans available:
Health Maintenance Organizations
Health Maintenance Organizations, known as HMOs, generally require you to get your care through a network of providers and you’ll usually need a referral from your PCP to see a specialist. They offer affordable premiums and out of pocket costs that are generally lower than PPO and POS plans.
Preferred Provider Organizations
Preferred Provider Organizations, known as PPOs, are similar to HMO plans in that they offer a network of preferred providers. However, you may see providers outside of the plan’s network but you’ll be responsible for a higher percentage of the costs. You will often not need a referral to see a specialist. The increased provider choice offered by PPO plans means that they are generally more expensive than HMO plans and will most likely result in an increased out-of-pocket expense to the insured.
Point of Service Plans
Point of Service Plans are also similar to an HMO plan in that you’ll generally be required to get your care from providers in your network. Depending on the plan you may be able to see providers outside of your network but you will be responsible for more of the costs. You may also need a referral to see a specialist.
Private Fee for Service
Private Fee for Service Plans (PFFS) are very flexible in that you generally don’t need to use a set network of providers and you likely won’t need to get a referral for specialist care. However, changes to Medicare law meant that some PFFS plans had to create provider networks so it’s important to check a plan’s rules before enrolling to ensure that it’s a good fit for your needs.
Health Maintenance Organization – Point Of Service
HMO – POS Plans are a combination of HMO plans and POS plans. Although you’ll pay a lower amount of the costs if you choose to get care from providers in your network you will still be able to get care from non-network providers.
Medical Savings Account Plan
MSAs are high deductible health plans with an attached bank account. Medicare deposits a tax-free lump sum into your account, which you can then use to pay your Medical bills. The amount may not equal the deductible of the plan so you may still be responsible for some of your healthcare expenses throughout the year.
How much does a Medicare Advantage Plan cost?
Medicare Advantage plans may start at a $0 monthly premium but the costs vary from plan to plan. You’ll pay a higher premium for plans that offer lower copays/coinsurance, deductibles and maximum out-of-pocket costs. You may pay a higher premium for plans with more provider choice, for example a HMO plan with a limited network of providers may be cheaper than a PPO plan with a broad network. Plans are available for all budgets, helping you find the right balance of cost and coverage.
Why choose a Medicare Advantage Plan?
Medicare Advantage Plans can offer additional benefits to those provided by your Original Medicare coverage, such as prescription drug coverage, dental, and vision care. They may also offer lower copays, a lower deductible, and a maximum out-of-pocket limit (unlike Original Medicare that has no limit). These help offer extra protection from high-unexpected medical bills. You’ll also be able to choose from multiple plans offered by insurance companies in your area so you can find a plan that provides the best combination of premium cost and coverage to fit your lifestyle.
Who’s eligible for a Medicare Advantage Plan?
If you’re enrolled in both Part A and Part B of Original Medicare you’re eligible to enroll in a Medicare Advantage plan. To qualify for Original Medicare you must be 65 or over and have earned the right to receive Medicare through paying Medicare taxes for at least 10 years and a U.S. citizen or lived in the U.S. for 5 years if a legal immigrant. Original Medicare is also available to people who have been receiving SSDI payments (Social Security Disability Income) for 24 months.