Medicare Advantage is also known as Medicare Part C. Part C Plans replace Original Medicare entirely. All Part C plans must offer at least the same benefits as Original Medicare. Like Medigap Plans, Medicare Advantage Plans to seek to limit your out pocket expenses. But it’s very important you don’t confuse the two as they are entirely different.
Unlike Medicare Supplement Plans, Part C Plans are not standardized. Benefits can vary widely and often offer fringe benefits such as dental, vision, hearing, and more. Plans very often offer prescription drug coverage as well. Because of the wide variety of benefits available, prices can also vary quite a bit. Plans can be viewed on Medicare.gov.
Pros & Cons of Medicare Advantage
Like with any part of Medicare, there are pros and cons. You should weigh these pros and cons as they apply to your personal circumstances to make the most informed decision.
- Cost Savings: There can be major cost savings associated with Medicare Advantage Plans. Many plans boast a $0 monthly premium and very often the copays are still pretty low. Monthly costs average $0-100 dependent upon your plan, carrier, and state. But no plan is actually “free”. At the very least, you’ll still need to keep paying for Medicare Part B.
- Additional Benefits: All Part C plans must offer at least the benefits of Original Medicare. However, they usually offer much more than that. Very often plans will offer prescription drug coverage, dental, vision, hearing, and more. These benefits are not offered by Original Medicare or Medicare Supplement Plans, so you would need additional supplementary coverage to cover them. This one-stop shopping approach is much more convenient than having to keep track of multiple plans.
- No Medical Underwriting: Another major benefit of Medicare Advantage Plans is that there is no medical underwriting. Being subject to medical underwriting means you can be charged more or denied outright based on your health. Obviously avoiding this can be beneficial for many reasons.
- Smaller Network: One of the biggest drawbacks to Medicare Advantage is giving up the Original Medicare network. It’s estimated that somewhere around 93% of doctors accept Medicare. So if you’re enrolled in Original Medicare (and even a Medicare Supplement Plan), it’s extremely easy to find a doctor or hospital. When you sign up for Medicare Advantage, you give up your Original Medicare. So, you’ll need to check in advance with your doctor or preferred hospital to make sure that they accept your plan. Advantage plans work as PPOs or HMOs so you may only have coverage in-network. Some people have reported difficulty finding doctors and hospitals who are in-network.
- Referrals: With Original Medicare, no referral is needed. With Advantage plans, you may or may not need a referral dependent upon your plan. This would need to be arranged through your PCP which can be a bit of a hassle. Also, sometimes doctors will refer you to someone who doesn’t accept your plan. Just a bit of extra homework to do on your end.
- Changing Benefits/Not Standardized: Benefits are not standardized with Part C plans which can make comparison shopping much more difficult. Additionally, although there are many fringe benefits offered, these benefits can change on a yearly basis. For this reason, it’s very important to review your plan annually during the AEP. You may discover that your plan no longer works for your needs.
- May have Copays (unlike Medigap): Medigap plans often waive your coinsurance and deductibles entirely. This is not always the case with Part C plans. You may have multiple copays for various tests and visits which can begin to stack up. Of course, there will be some type of out-of-pocket limit to protect you, but that does reset on a yearly basis and it won’t apply if you are receiving out-of-network services.
Evaluating What You Need
Comparison shopping with Medicare Advantage plans can be a little more difficult. Benefits, networks, and prices can vary widely. Ask yourself the following questions:
- Does this plan fit my budget?
- Are my preferred doctors and hospitals in-network?
- Does this plan cover my main needs (in addition to fringe needs)?
Does this plan fit my budget?
Many people get caught in the trappings of the budget. You need to look at a few things:
- Out of Pocket Maximums
The easiest to identify and understand is the monthly premium. Usually, these will range from $0-$100/month to keep your insurance active. Remember, even if a plan claims to be “free”, you’ll still need to pay for your Part B premium.
You may also have to meet a deductible out of pocket before the cost-sharing begins. There may be a separate deductible for prescription drugs.
Once you’ve met your deductible (if you have one), you’ll be responsible for copays or coinsurance dependent upon your plan and the specific services. Double-check what your cost share will be for the services you most frequently use. Don’t forget prescription drugs if your plan includes them.
Finally, assess the out-of-pocket maximum. Since Part C plans still have out-of-pocket expenses, make sure that whatever your out-of-pocket maximum is, it’s something that still feels comfortable to you.
Are My Preferred Doctors and Hospitals in Network?
If you already have a network of hospitals and doctors that you use, confirm that they will accept your new plan. Also, make sure there are specialists and additional facilities in your general area that accept your plan. Many people have reported difficulty finding doctors and facilities that accept their plan. You don’t want to have to accept subpar care or travel a significant distance.
Also, if your plan is an HMO, remember there is no coverage for out-of-network doctors and specialists. If you enroll in a PPO, you will have some coverage, but your bills may be higher than anticipated.
Does this plan cover my main needs (in addition to fringe needs)?
It’s easy to become overwhelmed when looking at the many different options for Medicare Part C. You need to take inventory of which benefits are most important to you.
- How often do you go to the doctor? Look at copays for basic doctors visits
- Do you have any pre-existing conditions that require a specialist? Check copays and networks for that as well.
- Do you take prescription drugs? If so, do you want your plan to cover them? What would be the prices for those drugs and are there in-network pharmacies that are close by?
- Do you have any upcoming major medical needs such as surgery? Price that out at your hospital of choice with your intended plan. Also, would this procedure require physical therapy?
Then take a look at the fringe benefits. Many plans may offer dental, vision, hearing, and even wellness. Still, your main benefits should be your primary concern. Specifically with dental, simply offering dental coverage is not enough. You need to do some additional research. Make sure the services you need are covered at a comfortable copay and that your dentist is in-network.
What Can and Can’t Be Covered
All Medicare Advantage plans must offer at least the same benefits as Original Medicare. From there, the plans can vary widely. You can view the available plans on Medicare.gov. Common benefits include:
- Fitness benefits
- Worldwide emergency
- Over-the-counter drugs
- In-home support
- Home safety devices & modifications
- Emergency response device
- Prescription Drug Coverage
Just remember, even a plan claiming to have a “$0 monthly premium” will still require that you pay your Medicare Part B monthly premium.
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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.