Medicare Advantage Plans: What is it and what does it cover?

Medicare Advantage Plans: What is it and what does it cover?

Medicare and Medigap have been around since the mid-60s. Then in the 70s, the government authorized private health plans to offer an alternative to traditional Medicare mainly through health maintenance organizations (HMOs) but also through Preferred Provider Organization (PPOs), Private Fee-for- Service plans (PFFS), Special Needs Plans (SNPs) and other types of plans. 1 By 2003, that alternative was called Medicare Advantage or Part C. About one quarter of the population that is eligible for Medicare chooses to purchase Medicare Advantage plans, doubling the number of beneficiaries enrolled in private plans since 2004. 2 Just as the name of Medicare Advantage has changed over the years so has its emphasis. Primarily begun as a way to save money, Medicare Advantage is now more focused on providing benefits that aren t covered by traditional Medicare plans. It continues to provide all the traditional benefits of Medicare but depending upon the plan can also include: eyeglasses, prescription drug coverage, hearing and health and wellness programs (some plans offer gym memberships for instance). 3 When might you choose a Medicare Advantage plan? Even though Medicare Advantage plans are run by private insurance companies, those companies offering the plans must follow Medicare s rules. The differences between Medicare Advantage and Medigap have more to do with how individuals access care and what their costs will be. Because Medicare Advantage plans provide for a cornucopia of options that may or may not meet an individual needs, they are not always appropriate unless the individual shopping for a plan is willing to put the time and effort necessary into researching their options before making any decisions. That effort includes not just reading the shiny brochures that companies will inundate the newly minted 65-yearold s mailbox with but also spending time researching, calling (insurance companies, Medicare, Social Security, Statewide Health Insurance Benefits Advisor (SHIBA), older friends and AARP to name a few), investigating quality ratings and even talking to financial advisors. For individuals unwilling or unable to put the time into the process, a Primarily begun as a way to save money, Medicare Advantage is now more focused on providing benefits that aren t covered by traditional Medicare plans. 1. Medicare.gov. Different types of Medicare Advantage Plans. http://www.medicare.gov/sign-up-change-plans/medicarehealth-plans/medicare-advantage-plans/types-of-medicare-advantage-plans.html 2. The Henry J. Kaiser Family Foundation. Medicare Advantage Fact Sheet. Nov. 30, 2012. http://kff.org/medicare/fact-sheet/ medicare-advantage-fact-sheet/ 3. Centers for Medicare and Medicaid Services. What is a Medicare Advantage Plan? Oct. 2010. http://www.medicare.gov/ Publications/Pubs/pdf/11474.pdf

Medigap policy is most likely the better policy, but if you re willing to work at it and any of the following are true, you may be better off with a Medicare Advantage plan: If you re fairly healthy : Costs from co-pays can add up fairly quickly if you become seriously sick or get a chronic illness and so can the cost of prescription drugs should your plan not cover a new medication. Each year you should verify that the plan continues to cover your necessary benefits, service area, and provider networks because the plans can change. If you have End Stage Renal Disease (ESRD) you cannot have a Medicare Advantage plan. If you re a home-body: Medicare Advantage plans are aimed at people who generally stick close to home. Plans usually require participants to use providers including emergency services within their network. You may not be covered if you become injured or sick while outside of your network. If you want benefits such as vision, dental or hearing care: Medicare does not cover these benefits but it will be incumbent upon you to ensure that you understand the entire package and whether or not it includes all the Medicare benefits associated with Medicare supplemental. 5 If you want to save money: This really goes back to whether or not you are healthy. Medicare Advantage plans often offer lower premiums and many find that the total costs of coinsurance, co-payments and deductibles are lower than traditional Medicare but the plans must be weighed carefully and annually as out-of-pocket maximums as well as the potential costs of a sudden illness or injury may negate any savings. Types of Medicare Advantage Plans HMOs, PPOs, PFFS plans and the like were created to help manage the costs associated with health care. Just like the programs do outside of the world of Medicare, they manage costs by relying on a network of doctors and providers and often require referrals from a primary care physician before you can see a specialist. Here are some of the basic differences 6 : HMOs: HMOs require beneficiaries to have a primary care physician who then provides referrals if you need to see another doctor. Most HMOs require that services and care are provided from doctors or hospitals in their network except in cases of emergency, out-of-area urgent care or out-of-area dialysis. If you have 4. Bankrate.com. 6 questions about Medicare Advantage. Constance Gustke. http://www. bankrate.com/finance/insurance/6-questions-about-medicare-advantage-1.aspx 5. The Wall Street Journal. How to Choose a Medicare Plan. http://guides.wsj. com/health/elder-care/how-to-choose-a-medicare-plan/ 6. Medicare.gov. Different types of Medicare Advantage Plans. http://www.medicare.gov/sign-up-changeplans/medicare-health-plans/medicare-advantage-plans/types-of-medicare-advantage-plans.html 1-877-76-AGING (762-4464

a point of service (POS0 option, you may be able to get out-of-network services at a higher cost for some services. Most HMOs have prescription drug coverage. PPOs: Allows patients to receive care from doctors and hospitals outside of their network but generally at a higher cost. Most PPOs offer prescription drug coverage but if they don t you cannot get coverage through Medicare Part D. Unlike HMOs, PPOs do not require you to choose a primary care physician nor do you need one to get a referral to see a specialist. PFFS: PFFS plans determine how much to pay doctors and other providers and how much you must pay to get care. You can go to any provider that will accept the plan or you can join a PFFS network. You can also choose out-of-network providers but you may have to pay additional costs. If prescription drugs are not covered in your PFFS plan, you can get coverage through Medicare Plan D. SNPs: SNPs limit enrollment to individuals with specific diseases (such as diabetes, HIV/Aids, dementia, chronic heart failure) or characteristics (live in a nursing home, require skilled nursing care, or are dual eligible). As a result, their benefits are tailored to meet the needs of those specific disease or characteristics. Providers are limited to only those within the SNP s network except for emergency or urgent care. All SNPs must provide Medicare prescription drug coverage. Most SNPs require you to have a primary care physician and may also require you to have a care coordinator. Narrowing down the search You can join a Medicare Advantage plan if you live in the service area of the plan you want to join, if you have Medicare Part A and Part B and if you do not have End Stage Renal Disease (ESRD). 7 If you are already covered by a plan, you need to join whichever new plan you choose during the enrollment periods (usually sometime in October to sometime in December). To find a plan that fits your needs, Medicare provides two handy tools on their website called the Medicare Plan Finder. You have the option of doing either a generalized search or a personalized search. You only need a zip code for the generalized search but you need your complete Medicare information for the other. You can access the tool at https://www.medicare.gov/find-a-plan. Just as there are specific times in which 7. Medicare.gov. Who can join a Medicare Advantage Plan? http://www.medicare.gov/sign-up-changeplans/medicare-health-plans/medicare-advantage-plans/who-can-join-medicare-advantage-plan.html 4

you can select any of the other Medicare plans, there are specific times for Medicare Advantage plans as well. You can sign up for Medicare Advantage plans during the seven month period that starts three months before your 65th birthday and runs for three months after the month that you turn 65. (You can get the exact dates you will be eligible to enroll in Medicare by checking out Medicare s Eligibility Tool.) 8 You can also enroll during open enrollment (usually in October and running through sometime in December) for Medicare Advantage and Medicare Part D. During that time you can switch an original Medicare plan to a Medicare Advantage plan or vice versa. You can switch to another Medicare Advantage plan if you are already enrolled in a Medicare Advantage plan; you can switch into or out of a Medicare Advantage plan with or without drug coverage or choose to either enroll or disenroll in Part D. The other times you can change involve either you changing where you live or you losing your current coverage. Medigap and Medicare Advantage Medigap policies cannot cover your deductibles, copayments or premiums for Medicare Advantage plans. In fact, if you have already purchased a Medicare Advantage plan, it s illegal for someone to sell you a Medigap plan unless you re switching back to original Medicare. 9 8. Medicare.gov. Medicare Eligibility Tool. http://www.medicare.gov/medicareeligibility/home. asp?dest=nav%7chome%7cresources%7celigibilitycalcquestions%7cresourcesovervie w&version=alternate&browser=firefox%7c10%7cmacosx&language=english 9. Medicare.gov. How Medicare Supplement Insurance (Medigap) policies work with Medicare Advantage Plans. http://www.medicare.gov/supplement-other-insurance/medigap/ medigap-and-medicare-advantage/medigap-and-medicare-advantage-plans.html About AgingOptions AgingOptions is a holistic elder care company helping families plan for, pay for, and coordinate the long-term care of elderly loved ones. AgingOptions services are geared towards retirees and those thinking about retirement and concerned about: Losing independence & having to move to a nursing home. Losing your assets to uncovered medical or long term care costs. Becoming a burden on your loved ones. AgingOptions 31919 Sixth Avenue South Federal Way, WA 98003 PROTECTING ASSETS PRESERVING QUALITY OF LIFE 1-877-76-AGING (762-4464) Info@AgingOptions.com 1-877-76-AGING (762-4464