Medicare Advantage Plans vs Original Medicare
December 15, 2021
I get many questions about Medicare Advantage Plans(MA). When I ask people why they are asking about them, most are saying it is because they had recently seen an advertisement on TV, received a post card in the mail or say something like my friend who lives in Billings has one and loves it. What generally is catching their attention is Advantage Plans saying they have zero premium, pay back part of their part B premium or say they cover dental, vision and hearing. If it sounds too good to be true, often it is!
A Medicare Advantage Plan is another way to get your Medicare Part A and Part B coverage. Medicare Advantage Plans, sometimes called “Part C” are offered by Medicare-approved private companies that must follow rules set by Medicare. Most Medicare Advantage Plans include drug coverage (Part D). There are several types of Medicare Advantage Plans. Each Advantage Plan has special rules about how you get your Medicare covered Part A and B services and your plan’s supplemental benefits. If you join a Medicare Advantage Plan, you will still have Medicare, but you will get most of your Part A and Part B coverage from your Medicare Advantage Plan. You must use the card from your Medicare Advantage Plan to get your Medicare covered services. Keep your red, white and blue Medicare card in a safe place because you will need it if you ever switch back to Original Medicare.
How do Medicare Advantage Plans work? When you join a Medicare Advantage Plan, Federal Medicare pays a fixed amount to your Advantage plan as it is a Medicare substitute sold and managed by private insurance companies. Think of it as choosing between ordering a meal (Medicare Advantage) at a restaurant, where the courses are already selected for you, or going to the buffet (original Medicare), where you must decide for yourself what you want.
If you elect to go with original Medicare, your buffet will include Part A (hospital care), Part B (doctor visits, lab tests and other outpatient services) and Part D (prescription drugs). If you decide to go with Part C, a Medicare Advantage plan, it will be more like a set menu, since a private insurer has already bundled together parts A and B and almost always D into one comprehensive plan. Some aspects of your care will be constant whichever plan you choose. Under both choices, any preexisting conditions you have will be covered and you will also be able to get coverage for prescription drugs.
There are important differences to consider before changing from Original Medicare to an Advantage plan:
Can you pick your provider?
1) Under original Medicare, you can choose any provider such as your primary care doctor and specialists who accept Medicare. You do not need to obtain a referral to see any medical provider and you do not have to worry about your doctor leaving a plan's network. That means chances are pretty good that any doctor you are currently seeing will accept Medicare and you will not have to change providers. But be aware that if you are looking for a new physician, 30 percent of primary care doctors are not taking new Medicare patients, so you will want to ask about that. Your pharmacy plan can be reviewed annually during open enrollment to suit your location, pharmacy of choice and medications so is tailored for you.
Under Medicare Advantage, you will essentially be joining a private insurance plan like you probably had through your employer. The most common ones are Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs) and Private Fee for Service (PFFS). Medicare Advantage employs managed care plans, and, in most cases, you would have a primary care physician who would direct your care, meaning you would need a referral to a specialist. HMOs tend to have more restrictive choices of medical providers than PPOs. Private Fee for Service Plans (PFFS) have a contracted network of providers as well if you go to a doctor or other health care provider, facility or supplier that doesn’t belong to the plan’s network for non-urgent care services your plan may not cover your services or your costs could be higher. Out-of-network doctors, hospitals and other providers may decide not to treat you even if they have seen you before. In an emergency, doctors, hospitals and other providers must treat you.
If your Advantage plan covers Part D (Pharmacy services) you must utilize the plan they choose, and it may not be tailored to meet your needs.
What services are offered?
2) Under original Medicare, you can get a wide variety of medical services including hospitalizations; doctor visits; diagnostic tests, such as X-rays and other scans; blood work; and outpatient surgery. While Medicare will cover most of your medical needs, there are some things it typically doesn't pay for such as cosmetic surgery or routine dental, vision and hearing care.
Under Medicare Advantage, you will get all the services you are eligible for under original Medicare. In addition, some MA plans offer care not covered by Original Medicare. These include some dental, vision and hearing care. Some MA plans also provide coverage for gym memberships. Which services are available varies by plan. Often the coverage of dental, vision and hearing is minimal or provided at an additional cost. Keep in mind there may be no providers in your area who are part of the network so you may pay more out of pocket or the entire cost yourself.
What are the costs?
3) Under original Medicare, the federal government sets the premiums, deductibles and coinsurance amounts for Part A (hospitalizations) and Part B (physician and outpatient services). For example, under Part B, beneficiaries are responsible for 20 percent of a doctor visit or lab test bill. The government also sets maximum deductible rates for the Part D prescription drug program, although premiums and co-pays vary by plan. Many beneficiaries who have Original Medicare also purchase a supplemental or Medigap policy to help defray out-of-pocket costs.
Under Medicare Advantage, enrollees must still pay the government-set annual Part B premium (in 2022 it is $171.10) and sometimes an additional premium for the MA plan. But instead of paying the 20 percent coinsurance amount for doctor visits and other Part B services, most MA plans have set co-pay amounts for a physician visit. Many also have high deductibles some as high as $8000.00 a year. MA plans have an annual cap on out-of-pocket expenses to protect you. In 2021 this was increased to $7550.00 and remains that for 2022 although some plans have a lower cap. Since you cannot have a supplement (Medigap) policy with an Advantage plan should you switch from Original Medicare to an Advantage plan and drop your supplement policy you might not be able to get it back, have a higher premium or have to go through underwriting should you return to Original Medicare.
You should check if you are eligible for Medicaid or any of the assistance programs for low-income enrollees. Both Original Medicare and Advantage plans will work with people on these programs.
Under Original Medicare, to get the full array of services you will likely have to enroll in four separate elements: Part A; Part B; a Part D prescription drug program; and a supplemental or Medigap policy. Physicians and hospitals must file claims for each service with Medicare that you will have to review.
What is the largest downside to Advantage plans?
Under Original Medicare, you can access care anywhere in the United States if the provider accepts Medicare.
Medicare Advantage plans are based around networks of providers that are usually self-contained in a specific geographic area. So, if you travel a lot or have a vacation home where you spend a lot of time, your care may not be covered if you go to out-of-network providers, or you would have to pay more for care. In addition, while MA plans are pretty much available throughout the United States, the choice of plans is more limited in rural areas.
Get a comprehensive list of the Advantage plan co-pays and deductibles and contact your health care provider and hospital to see if they accept the plan for payment and under what conditions to help you determine expected coverage beyond the hype of the advertisement.
Neither original Medicare nor Medicare Advantage covers your health care abroad.
Advantage plans are most suitable to low use healthy clients who have access to network providers.
Rural Montana has its challenges and access to Advantage plan networks is one of them.