When you turn 65, you’ll have many decisions to make regarding your Medicare. One of the most important decisions that you have to make is whether you’ll keep Original Medicare or replace it with a Medicare Advantage plan. A new warning from the Mayo Clinic may influence that decision.
What is Medicare Advantage?
So what are medicare advantage plans? Medicare Advantage plans are sometimes referred to as Part C plans or Managed Care Plans. They are an alternative to Original Medicare. Part C plans will replace your Original Medicare entirely.
Additionally, Part C plans must offer at least the same benefits as Part A & Part B but very often they will offer additional benefits such as dental, vision, hearing, prescription drugs and more. You’ll also have an out of pocket maximum which is not offered by Original Medicare.
These plans are offered by private carriers. Benefits and prices can vary widely. Some plans will even claim to be “free”. Of course, they are not. You will have pay for Part B at the very least. Basically, Original Medicare will pay a Medicare Advantage plan for taking on the risk of a beneficiary, but you will still have to contribute financially.
Medicare Advantage plans have networks. They can be HMO plans or PPO plan. Herein lies the problem with the Mayo clinic. More on that in just a minute.
This is in stark contrast to Original Medicare or Original Medicare and a Supplement Plan. There are no networks with Original Medicare. Almost all doctors and hospitals accept Original Medicare.
Mayo Clinic & Part B Excess Charges
You may choose a Medigap plan to cover the gaps of your Original Medicare. Basically these types of plans will cover or help to cover deductibles, copays and coinsurance for Part A & Part B. For example, Plan G will cover all of out of pocket expenses except your Part B deductible. It will also cover Part B excess charges.
Doctors and hospitals who accept Medicare must accept the amount that Medicare will pay out. However, they can choose to charge up to 15% more. This is known as a Part B excess charge. The beneficiary would be responsible for this additional 15% charge unless their Medicare Supplement Plan covers Part B excess charges. Plan G covers excess charges. Plan N does not. This is the main difference between these two plans.
Now, it is important to note that excess charges are not common. However, the Mayo Clinic does charge excess charges. So, even with a Medigap plan, you should be aware of this.
Mayo Clinic & Medicare Advantage
Now let’s switch gears and talk about the warning from the Mayo Clinic. Medicare Advantage plans may operate as an HMO or PPO. The Mayo Clinic would like Medicare beneficiaries who have visited their facilities in Arizona and Florida to know that it will not contract with most Medicare Advantage HMO plans. They will not accept appointments for anyone who is out of network.
A letter was sent to those who had visited the Mayo clinic in the past. So, if you are not a current or past patient, it’s likely that you did not even know this was happening.
Why is This Important?
This is reflective of a larger problem with Medicare Advantage plans, which is the networks. You’ve probably had to work within a network in the past if you had marketplace insurance or insurance through your employer. So this may not seem like such a problem. And to be fair, it often isn’t.
However, the truth is that as we age our medical needs also change. And with more extensive medical needs, it is more important than ever to have access to a wider range of doctors and hospitals. With Original Medicare supplemented by a Medigap plan, you ensure this access. This is just not the case with Medicare Advantage.
The Mayo Clinic is regularly ranked in the U.S. News & World Report rankings of top hospitals. The Mayo Clinic is consistently acknowledged among the very best in the nation in many specialties including:
- Cardiology and heart surgery
- Neurology and neurosurgery
…and many more.
So, if you wish to have access to what is considered the very best, you may want to rethink Medicare Advantage. The Medicare Advantage AEP is Oct. 15-Dec. 7. You can join, drop or switch plans at this time.
Jesse Smedley is the Principal Broker for iHealthBrokers and the founder, president, and CEO of Smedley Insurance Group, Inc. and iHealthBrokers.com. Since the inception of SIG in 2007, Jesse has been dedicated to helping people save money on their health insurance by providing them with resources to educate themselves on all their health insurance options, both under age 65 and Medicare beneficiaries. He is featured in many publications as well as writes regularly for expert columns regarding health insurance and Medicare.