What Are Medicare Advantage Plans? (“Part C” Plans)
- Medicare Advantage Plans, sometimes called “Part C”, are plans from a private insurance company. The private insurance companies basically overlay your Medicare Part A, B and D benefits and administer your plan. They become the primary payor instead of Original Medicare. They cover the same things as Original Medicare but at different costs and co-pays because they are run by the individual companies. Your clinic or hospital will bill the Medicare Advantage plan, not Medicare.
- Advantage plans have networks and they are usually within your local area. Staying within your network for all non-emergency needs is recommended. If you go outside of your network, you may have to pay more for services than you would in-network. Most plans cover you as in-network in these 3 areas:
- Emergency care
- Out-of-area urgent care
- Out-of-area dialysis
- If you move to a different county or state, you typically will have to change health plans if this plan is not available in your new area. You may even have to pay a different premium.
- Medicare Advantage plans vary in price but can have very low to $0 premiums. The reason they can cost so little is because Medicare pays the insurance company you select, a fixed amount to take on your risk and administer your benefits. Think of these plans as paying-as-you-go, rather than larger premium Medicare Supplement plans that are more comprehensive. This means you will pay co-pays, co-insurance and have a max out of pocket. The max out of pocket is a cap, not a deductible.
- One thing our clients like about Medicare Advantage plans is that they only have one ID card, because most of these plans include your medical and drug coverage.
- These plans can also offer some bells and whistles like dental, vision, hearing, annual physicals, or gym memberships that Original Medicare doesn’t offer. At Supplement Plan Advisors agency, we advise people to pick a plan not only for the bells and whistles but, to pick plans based on the medical and drug benefits, as these tend to be the most expensive.
- The co-pays, co-insurance, max out of pockets, and drug deductibles of a Medicare Advantage plan can change each year. Make sure to always read your Annual Notice of Change (ANOC) each year. You will get a copy each year by September 30th and it tells you how your Medicare Advantage plan is going to change the following year.
What Are the Types of Medicare Advantage plans?
- Health Maintenance Organization (HMO) plans typically mean there is a smaller network and you would be billed lower amounts if you stay in network. If you go out of network you would usually pay more. Most plans cover emergencies as if in-network. In most cases, you need to choose a primary care doctor in HMO Plans. HMO plans often require you to get a referral to see a specialist. Although there are some services; like yearly screening mammograms, that do not require a referral. The premium costs vary, you pay co-pays, co-insurance, and have a max out of pocket.
- A Preferred Provider Organization (PPO) plan typically has a broader network and some providers are “preferred” so you can get your services at lower cost if you use those providers. You don’t need to choose a primary care doctor in PPO Plans. In most cases, you don’t have to get a referral to see a specialist in PPO Plans. If you use plan specialists, your costs for covered services will usually be lower than if you use non-plan specialists.
- Medical Savings Accounts (MSA) are the newest type of Medicare Advantage plan, so they are not as common yet. MSA’s combine a high deductible health plan with a bank account that the plan selects. They have no network and you can go anywhere Medicare is accepted.
- When you choose this plan, you get an allotted amount paid to you each year for medical expenses to put into an MSA Bank Account. When you go for any medical services you can use the money you have been given to pay for services. Once you use the money you are given, then you pay all costs until you hit your high deductible. You pay the full costs of Medicare allowed amounts on this plan and not copays like traditional Medicare Advantage plans.
- The nice part about these plans is that if you don’t use the money that is deposited into your account it keeps rolling over each year! So, you could accrue quite a bit of money if you don’t use medical services or you use very little medical services. If you use the money for non-qualified expenses you could accrue a penalty.
- The funds are tax free if you use them for qualified medical expenses. If you stay enrolled through the end of the year and then switch to a different plan, you can keep the money you have accrued and take it with you on the new plan.
- These plans are similar to Health Saving Accounts (HSA’s) available to people prior to starting Medicare.
- Medicare MSA Plans do not cover Medicare Part D prescription drugs. If you join a Medicare MSA plan and need drug coverage, you will have to get a standalone Medicare Prescription Drug plan.
A Special Needs Plan (SNP) is a plan for people with specific diseases, health care situations or low incomes. SNP’s cover the same things traditional Medicare Advantages plans do but may offer extra benefits for their specific health needs.
When Are the Enrollment Periods For A Medicare Advantage Plan?
- If you want to enroll in a Medicare Advantage plan you must enroll in Medicare Part A and Part B through Social Security. You can enroll in Medicare 3 months days before you turn 65.
- Medicare Advantage plan changes are between October 15-December 7th each year. Anyone can join or switch a Medicare Advantage plan and there is only one health question – whether you have end stage renal disease or “kidney disease”. Your coverage would start January 1st.
- If you are moving from one Medicare Advantage to a different Medicare Advantage plan you don’t need to cancel the first plan. Since Medicare runs these plans, they will cancel your old plan for you.
- When you first go on Medicare you can sign up for an Advantage plan during your Initial Coverage Enrollment Period (ICEP) 3 months before your 65th birthday and 3 months following your 65th birthday.
- If you are over 65 and still on a creditable group plan through you or your spouse’s employer, you can sign up for a Medicare Advantage plan through a Special Enrollment Period (SEP). When you come off the group plan and sign up for Part B, you can also sign up for a Medicare Advantage plan.
- If you have Medicare Part A coverage and do not have a group plan, you can sign up for Medicare Part B January 1st to March 31st of each year and Medicare Part B would start July 1st. You could also sign up for a Medicare Advantage plan to start July 1st.
The information contained on this web page is provided for educational and informational purposes only. While we have taken every precaution to ensure that the content of this page is current and accurate, errors can occur. Supplement Plan Advisors LLC assumes no responsibility for any errors or omissions in the content of this page. Sources: Medicare.Gov & SSA.Gov