Everything You Need To Know About Medicare Advantage
Medicare Advantage is a managed health care plan that acts as an alternative to the original Medicare. Medicare is provided to individuals 65 years of age and older who have met the working credit requirements by paying into the Medicare system through a payroll deduction. Individuals under the age of 65 with certain disabilities and people of all ages with end stage renal disease (permanent kidney failure requiring dialysis or a kidney transplant) also qualify for Medicare and can utilize Medicare Advantage plans instead of original Medicare.
United States citizens and legal residents who have resided in the US for at least five years and are fully insured under the Social Security Administration program usually receive Part A (hospital insurance) without any additional cost. Individuals who do not traditionally qualify for Part A benefits are required to pay a monthly premium.
Although Medicare beneficiaries have been receiving Medicare benefits through private health insurance plans since the 1970’s, the Balanced Budget Act of 1997 named Medicare name the managed care program “Medicare+Choice” or “Part C.” Upon the passing of the Medicare Prescription Drug, Improvement and Modernization of the Act of 2003, the program then became known as Medicare Advantage, and prescription drug coverage was added.
Medicare Advantage Benefits
Medicare and Medicare Advantage offers two benefit options: Part A and Part B. Part A pays for hospital services. Whereas most individuals do not have to pay for Part A, enrollees are required to pay for Part B coverage. Part B pays for medical insurance (ie. physicians and surgeons in addition to outpatient services, such as emergency room care, diagnostic testing, laboratory testing, and medical equipment).
The Centers for Medicare & Medicaid services (CMS) processes all original Medicare claims. However, private health insurance companies offer Medicare Advantage plans, and they receive financial compensation from the federal government to help offset health care costs. Medicare Advantage claims are not processed through the Centers for Medicare and Medicaid Services. The health insurance company processes the claims for their enrollees.
Medicare Advantage plans usually include a Part D benefit that provides prescription drug coverage. Enrollees of the Medicare Advantage program typically pay a small co-payment, which could be as low as $20 when visiting their physician. Co-payments may be higher when visiting a specialist. With the original Medicare, coinsurance remains at 20%.
Insurance providers that offer Medicare Advantage plans usually offer healthcare services that are equivalent to, or even exceed, the services offered under original Medicare plans. Plans may also differ slightly from the original Medicare. Medicare plans are designed to specifically reduce out of pocket expenses when visiting a physician or seeking health care. Medicare Advantage plans may offer expanded benefits, which include podiatry, dental, vision, chiropractic, hearing, and other health care benefits that are not covered by the original Medicare.
Medicare Advantage plans usually have lower annual deductibles, which is defined as the amount that you have to pay out-of-pocket in a year before your healthcare plan picks up 100% of the cost of the claim with the exception of any co-payments, so long as the claim is made within the policy’s network.
Medicare Advantage plans come in different sizes and shapes, which are described in more detail below and each type of plan has different rules and requirements. For instance, individuals who are enrolled in a Medicare Advantage HMO are unable to utilize the services of a health care specialists or out-of-network provider without first obtaining authorization. Individuals enrolled in a Medicare Advantage PPO can visit any physician or hospital without the need for authorization.
Medicare Advantage Plans
Medicare Advantage includes Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Private Fee for Service plans, Special Needs Plans, and Medicare Medical Savings Account Plans.
Health Maintenance Organization (HMO) Plans
Medicare HMO’s have a network of participating providers. These plans usually negotiate fees with providers, and enrollees are required to use the providers within the network or pay higher cost sharing expenses for out of network services. Enrollees are also required to choose a primary care physician and in most cases obtain a referral to see a specialist. Referrals are not required for services like yearly mammogram screenings. If medical care is received outside of the plan’s network, the enrollee may be required to pay the full cost. Following the plan’s rules is essential in avoiding high medical cost.
Preferred Provider Organization (PPO) Plans
Are a type of Medicare Advantage Plan (Part C) that is offered by a private health insurance carrier. With a PPO plan, you pay less if you use doctors, hospital, and healthcare providers within the plan’s network. You have additional cost if these services are provided by a medical professional outside of the network. Unlike the HMO, enrollees can usually obtain medical services from any doctor, hospital, or health provider
that is not a part of the network. This plan is much more flexible than the HMO plan. Prescription drugs are usually covered under this plan. Enrollees are not required to choose a primary care physician, nor are they required to obtain a referral. PPO plans typically offer a variety of extra benefit, but there are usually extra fees charged to the enrollee.
Private Fees for Services (PFFS)
Are a type of Medicare Advantage Plan (Part C) offered by a private health insurance carrier, and these type of plans generally do not have provider networks. They usually pay for Medicare coverage services using Medicare’s fee schedules, and enrollees may use any provider that is willing to accept the plan’s payment. Enrollees in this plan are not required to have a primary care physician, and a referral is not required. Enrollees may be required to pay a copayment or coinsurance when seeking medical services.
Special Needs Plans (SNP)
iI a type of Medicare Advantage plan that is limited to only individuals with specific diseases or illnesses. Benefits are usually tailored to meet the medical needs of that individual. Doctors and hospitals within the Medicare SNP network, with the exception of medical emergencies, generally provide care and services. Prescription drug coverage is provided with all Special Needs Plans. Enrollees are usually required to have a primary care physician and referrals are required to see a specialist. However, referrals are not required on services like, pap smears or pelvic exams.
Member of the Special Needs Plans is limited to the following groups:
1) Individuals who live in certain institutions, like nursing homes.
2) Individuals who qualify for Medicare and Medicaid
3) Individuals with specific disabling conditions such as Diabetes or End-Stage Renal Disease, HIV/AIDS, or chronic heart failure.
Medical Savings Accounts (MSA) Plan
is similar to a health savings account. It combines a high deductible plan with a medical savings account. The high deductible plan will only provide health coverage when you have met your annual high deductible. The medical savings account deposits money into your savings account, and you can decide how funds will be distributed to cover medical expenses. Some plans will offered extra benefits such as dental or prescription drug.
Again, Medicare Advantage plans cover at least the same services that are offered by Medicare Part A and Part B under original Medicare plans. In order to get a grasp on what kind of services Medicare Advantage plans offer, it would be easiest to understand what kind of services Medicare Part A and Part B cover.
Medicare Part A Coverage
Medicare Part A generally covers services like doctor visits and lab test when it is medically necessary. The following additional services are also usually covered.
1) Hospital care
3) Skilled nursing facility care
4) Home health services
5) Nursing home care
Hospice care is not covered under any Medicare Advantage plan, so it is recommended that you sign up for Medicare Part A, which again is free if you have paid payroll taxes for the last 10 years, to cover any hospice care costs that you may incur.
Medicare Part B Coverage
What is not usually covered by Part A & Part B?
2) Most dental care
3) Cosmetic surgery
5) Hearing aids
6) Eye examinations and prescription glasses
Why many individuals choose Medicare Advantage rather than the original Medicare?
1) Medicare Advantage offers prescription drug coverage. Original Medicare does not include prescription drug coverage, unless you purchase Part D. In 2013, the average monthly cost for Part D coverage was $40 according to the Kaiser Family Foundation, a nonprofit research institute.
2) Medicare Advantage offers a cap on out of pocket expenses. Original Medicare does not offer a cap on out of pocket expenses. You keep paying a portion of the services regardless of how many times you use them. Once the maximum amount of out of pocket expenses have been reached, the Medicare Advantage plan will then cover all qualifying expenses.
3) It is more cost effective that adding Medigap coverage to the original Medicare.
4) Most Medicare Advantage plans covers vision, dental, nursing home care, and assisted living facilities, which are not usually covered under the original Medicare.
How do I join a Medicare Advantage Plan?
There are a variety of Medicare Advantage plans, and you want to find a plan what works best for you. Here are the current enrollment options:
1) Use the Medicare’s Plan Finder, and visit the plan’s website to see if you can enroll online.
2) Complete a paper application and submit it to the plan.
3) Call the plan you would like to join and request enrollment procedures.
4) Call 1-800-MEDICARE (1-800-633-4227).