When it comes to Medicare, you essentially have two avenues for financial assistance with your healthcare costs: Medigap plans, also referred to as Medicare Supplements, and Medicare Part C, commonly known as Medicare Advantage. Medicare Advantage serves as an alternative to traditional Medicare and has sparked considerable debate. Nevertheless, it’s the choice of nearly 30 million Americans for their healthcare coverage.
Medicare Advantage plans come with their own set of advantages and disadvantages. If you’ve ever watched television, you’ve likely seen numerous ads touting the extra benefits these plans offer.
The abundance of information and sometimes misleading claims can make the process of selecting a plan quite challenging and perplexing. In our exclusive Medicare Q&A community on Facebook, we often encounter questions about why someone would opt for a Medicare Advantage plan when so many seem to endorse Medicare Supplement plans. To address this, let’s delve into some crucial factors you should weigh when deciding on a plan.
First, how do Advantage plans even work?
Before delving into the reasons for considering an Advantage plan, it’s crucial to grasp how they operate.
Medicare Advantage plans serve as an alternative to traditional Medicare and are provided by private insurance firms. Opting for an Advantage plan means you decide to access all your Medicare benefits (Part A, Part B, and Part D) via the chosen insurance provider. While these plans are mandated to offer benefits equivalent to Medicare Parts A and B, the expenses can differ across plans.
It’s also worth noting that Medicare Advantage plans come with specific network limitations. The insurance provider establishes a network of healthcare professionals and pharmacies, to determine your cost-sharing amounts. It’s vital to compare costs between plans, as once you commit, you’re bound to that plan for the entire year.
Why might someone choose a Medicare Advantage plan?
Upon understanding the intricacies of Medicare Advantage plans, you might conclude, “That seems manageable,” or “It feels a tad overwhelming.”
We’re addressing your health coverage here. Merely skimming the surface and overlooking the specifics isn’t the best approach. It’s imperative to delve deeply into the subtleties, grasp the plan’s framework, and be aware of your privileges. Here are 10 considerations that might influence someone to select a Medicare Advantage plan:
1. You Can’t Be Turned Down
Contrary to Medigap plans in many regions, Medicare Advantage plans won’t reject your application because of prior health issues. That’s correct! Providers of Advantage plans don’t pose health-related queries in their forms, ensuring you won’t be refused coverage based on your health status.
2. Low monthly premiums
Given that Medicare Advantage plans might lead to higher out-of-pocket costs compared to Medigap, several providers offer reduced or even no-cost plan premiums. The potential savings in monthly premiums, when compared to Medigap plans, can be quite appealing for healthier seniors who may not frequent the doctor or for those adhering to a tighter budget.
3. Out-of-Pocket Maximum
With just Original Medicare, Part B covers 80% of your outpatient services, leaving you responsible for the remaining 20%. Regrettably, this 20% has no upper limit. However, with a Medicare Advantage plan, there’s a set yearly maximum for out-of-pocket expenses. Regardless of the total cost of your medical services, you’re assured it won’t surpass a specified limit.
4. No rate increases due to age
Medigap plans come with varied rate classifications, implying that some individuals might experience a premium hike based on their age. In contrast, with Medicare Advantage plans, your premium remains unaffected by age-related factors. While all insurance plans might see increases due to elements like inflation or escalating healthcare costs, there’s no concern of facing a significant premium jump between the ages of 65 and 80 solely based on age.
5. You can switch every year
Occasionally, after enrolling in an Advantage plan, you might find it’s not the right fit. Fortunately, there are two periods each year when you can switch plans. Each year, you’ll receive a letter notifying you of any alterations to your existing plan for the upcoming year. The good news is, you’re not bound to accept these changes if they don’t align with your preferences. Making a switch can help guarantee that your chosen plan consistently meets both your health requirements and financial constraints.
6. Only one ID card
A notable advantage of the Medicare Advantage plan is the convenience of managing just one ID card. It consolidates both your medical and prescription benefits. In contrast, with a Medigap plan, you’d have to juggle cards for Original Medicare, Medigap, and Part D. With the Advantage plan, you can securely store your Medicare card and only need to carry the card associated with your Advantage plan.
7. Extra Benefits, anyone?
In exchange for higher out-of-pocket costs, several providers include added perks in their plans, like dental care, reimbursement for Part B premiums, or even gym memberships. Although these benefits aren’t mandatory and can vary each year, numerous providers nationwide have been enhancing these additional offerings to stay ahead in the market.
8. Networks are not a dealbreaker
A significant point of debate regarding Medicare Advantage plans, in contrast to Original Medicare, is the network limitations inherent to Advantage plans. For many, this poses a challenge, especially if they desire the liberty to choose any healthcare provider or wish to continue with their long-time doctor.
However, this isn’t a concern for everyone. Some individuals don’t mind transitioning to different doctors or pharmacies. It’s also worth noting that the size and scope of Advantage plan networks vary. A good number of individuals discover they’re part of a broad network, offering a diverse range of healthcare providers compatible with their plan, should they need to consult a specialist or switch doctors.
9. Get to pay as you go
For some, paying a higher monthly insurance premium is acceptable. The assurance of being protected during unforeseen events outweighs potential savings. On the other hand, some view elevated premiums as unnecessary expenditure and lean towards the pay-as-you-go approach of an Advantage plan. This choice becomes particularly attractive for seniors in robust health, as they stand to save considerably on annual premiums if their doctor visits are infrequent.
10. Affordable copays/coinsurance
While the payment structure might not be as straightforward as Medigap plans, the copays and coinsurance under a Medicare Advantage plan can often be much more affordable than with Medicare alone. For instance, you might face a daily copay for an inpatient hospital visit, but you won’t be immediately hit with the Part A deductible (valued at $1,600 in 2023) as you would with just Medicare Parts A and B.
Tracking these copays and coinsurance can sometimes be a bit challenging, but they serve as an alternative to potentially paying large sums all at once.
How do you get an Advantage plan?
Initially, you need to be registered with Medicare Parts A and B. Without this foundational step, plan enrollment isn’t possible. Then, ensure you’re within the appropriate enrollment period to explore these plans. Collaborating with a broker, like our team at Boomer Benefits, can guide you in pinpointing a plan that aligns with both your health requirements and financial constraints, as well as inform you about the right time to apply.
After joining a plan, any changes or switches can only be made during a legitimate enrollment period. For the majority, this period is the Annual Election Window, which spans from October 15 to December 7. Hence, when zeroing in on a plan, it’s crucial to ascertain whether it’s the best fit for your needs.
To fear or not to fear?
When considering Medicare Advantage plans, it’s essential to review the plan’s Summary of Benefits and its formulary before committing. You should have a clear understanding of your potential annual out-of-pocket expenses. Additionally, it’s crucial to examine the plan’s Part D drug list to ensure it’s cost-effective and includes your vital medications.
While the additional perks from an insurance provider might seem enticing, it’s vital not to overlook the core medical coverage offered. Regardless of your health status, understanding how a plan addresses your medical needs is paramount.
It’s worth noting that the plethora of plan options available varies by location, meaning the choices available to someone might differ from yours. Some individuals swear by their Advantage plans, praising the seamless care they receive, while others have faced challenges like claim rejections and network complications. Remember, the Advantage plan plays a pivotal role in overseeing your care.
Personal experiences can significantly influence one’s perception of these plans. Like many aspects of Medicare, there’s always scope for refining Advantage plans. However, they have been a boon for numerous seniors, offering them cost-effective care they might not have accessed otherwise, leading them to opt for a Medicare Advantage plan.
Key Takeaways
- Advantage plans often come with budget-friendly monthly rates.
- They limit your overall expenses.
- Offer extra benefits not found in standard plans.
- There are no rate increases based on age progression.
- Flexibility to alter plans each year.
- Operate on a pay-per-use model.