When do I need a Medicare advantage plan?
According to CMS.gov, the vast majority of beneficiaries have access to a Medicare advantage plan. However, plan offerings may greatly vary in their benefits and premiums – this is why a comparison of Medicare advantage plans is so important.
Medicare advantage plans continue to be very popular, because many include valuable benefits over the original Medicare coverage, such as prescription drug coverage and fitness center memberships. All advantage plan policies must provide the complete spectrum of Medicare Part A and Part B benefits, including emergency and urgent care. They do, however, not pay for hospice care, which stays with original Medicare.
You will find different kinds of Medicare advantage plans including HMO, Local PPO, Regional PPO, MSA, Cost, PFFS, and other, with the most popular being structured as HMO (Health Maintenance Organization) and PPO (Private Provider Organization) plans. Insurance providers offering this type of Medicare insurance must be approved by the Federal Government, and each plan must adhere to regulations set by Medicare.gov. When you enroll in an advantage plan, you are still insured by Medicare. Your medical care however will not be provided by original Medicare, but – if you select an HMO plan – by a network of service providers that have contracted with the plan. If you select a PPO plan, you are allowed to seek medical services outside the plan’s network, but you will have a higher co-payment.
How to find 5-star rated Medicare advantage plans
The CMS (Center for Medicare & Medicaid) audits each year how well Medicare advantage plans perform for different criteria, including benefits, member satisfaction and pricing. The best way to find a 5 star rated Medicare advantage plan in your local area is to use the Medicare Plan Finder at https://medicare.gov/plan-compare/. Using this tool, you may pre-select high rated Medicare advantage plans in your geographic area, and then visit the websites of the private insurance companies directly for details about each plan. You may also use the help of a licensed agent knowledgeable with Medicare insurance.
How much are Medicare advantage plans, and what are ‘zero premium’ plans?
While you must keep paying your monthly Part B premium to Medicare, you won’t have an additional premium for your advantage plan benefits if you select one of the very popular ‘zero premium’ plans, as offered by insurance companies in many local areas. According to CMS, about 60 percent of Medicare advantage plan enrollees currently have a ‘$0 premium’ Medicare Advantage plan with no additional premium over what you already pay for your Part B. For other plans you may have to pay an additional monthly premium. Which is plan is best for you depends on your personal medical and medication needs.
When you compare Medicare advantage plans, it is important that you compare the total costs, including premium, co-payments, co-insurance and deductibles. Plans will not only vary in benefits, but also in premiums, and annual out-of-pocket costs.
Medicare Advantage vs. Supplemental insurance
In a Medicare advantage plan, your medical services will be paid for by the plan, not by original Medicare anymore. This is why most plans are structured to use a network of providers and pharmacies for you to use in order to be covered. The insurer receives a fixed amount per beneficiary from the government, and contracts with participating medical service providers in order to be able to offer lots of benefits at low costs.
An alternative to Medicare advantage plans is Medicare supplemental insurance, also called ‘Medigap’. It is also provided by private insurance companies. It does not substitute your original Medicare, but helps to pay the amount that is not covered by original Medicare. You are not limited to any provider network, but free to see any doctor that accepts Medicare. The covered portion for approved services of your bill will be paid directly by original Medicare, (typically to a maximum of 80%), and the remainder will be taken care of by the insurer, as defined by your supplemental policy.
However, contrary to many advantage plans, supplemental policies never include prescription drugs. So if you want to help cover your medication expenses, you must join a separate Part D Prescription Drug Plan for an extra premium.
To summarize, Medicare advantage plans have typically more benefits over Medigap plans which makes them a cheaper, but more restricted way to add additional coverage to Medicare.
