The Medicare Annual Election Period (AEP) runs from October 15 to December 7, and so beginning around October 1 every year, you probably see advertisements for Medicare Advantage plans just about every time you turn on your television. These ads are usually touting all the benefits of Advantage plans and telling you how you should be enrolled in one if you are over 65 and give you an 800 number to call. The fact is that Medicare Advantage may indeed be right for you, depending on where you live and your particular situation, but it’s important to understand clearly what Medicare Advantage is – and isn’t – before you put too much stock into those ads. It’s vital that you consult with an experienced Medicare professional to review your needs and options before making that move.
Medicare Advantage, often referred to as Medicare Part C, is a completely different way to receive your Medicare benefits from original Medicare. Under original Medicare, you have separate Part A (hospitalization) and Part B (medical expense) coverages that are administered by the government through the Centers for Medicare and Medicaid Services, and a separate Part D (drug plan) that is administered through a private insurance company that has contracted with CMS. Under this model, you may be enrolled in various combinations of A, B, and D plans with separate coverages for each.
Medicare Advantage is a way of conveniently rolling all of your A, B, and D benefits into a single health plan administered through a private insurance company. These companies contract with CMS in much the same way they do for Part D drug plan coverage, and they agree to deliver at least the same benefits as original Medicare in return for reimbursements from CMS. In addition to the standard Medicare benefits, these plans frequently include additional benefits not included in original Medicare, such as vision, dental, or hearing coverage. Additionally, all Medicare Advantage plans include the protection of a maximum annual out-of-pocket limit that you don’t have under original Medicare. But if you currently have a Medigap supplement, you’ll have to give it up, because you can’t have both a supplement and an Advantage plan.
Sounds pretty nice, huh? Well, yes, but…. there are some tradeoffs that have to be weighed out before deciding whether it’s right for you. The most important is that under an Advantage plan, you are locked into provider networks that may or may not be beneficial for you. If your doctor or pharmacy is not part of the network set up by your plan provider, it’s possible that you might have to find a new one that is. And if you travel outside of your network area, you may have additional costs if something happens and you need to see an out-of-network provider. Under original Medicare and a Medigap supplement, you are free to see any provider who accepts Medicare without those restrictions.
There are also some costs associated with Advantage plans that you don’t have under original Medicare, starting with a monthly premium in addition to the Part B premium that you already pay. Some plans may offer a premium as low as $0, while others may charge a higher amount, but it is always there. And while Advantage plans do offer the security of annual out-of-pocket limits, there are back-end costs that can add up in some situations, including copayments and coinsurance that don’t exist under original Medicare. A copayment when you visit your doctor might not be significant if you only see your doctor every few months, but if you develop a health issue that requires frequent visits, a copay can quickly add up to more than the cost of a good supplement.
Lastly, Medicare Advantage plan benefits, networks, and premiums can change year over year. If you joined a particular plan for a certain benefit or because your doctor or pharmacist is in-network, you can be left with some difficult choices to make if those factors change at some point. You may choose to find another Advantage plan or go back to original Medicare, but getting a Medigap supplement may be more difficult if your health has changed because you will have to pass health underwriting.
These issues can be very complex, and it’s vital that you not try to make these decisions alone. Talk to an experienced Medicare professional that you trust to find out whether an Advantage plan is right for you. If you have questions, we are here to help and will be happy to sit down and assist you in choosing the right plan at the lowest cost. There is never a charge for a consultation, and we will never recommend a plan that isn’t right for you just to make a sale. Call us at (662) 269-2519 or email us to schedule an appointment with one of our experts to examine your options.