Approaching age 65 means that it’s time to turn one’s attention towards Medicare. Trying to decipher what all the Part As, Bs, Cs, Ds mean, and what the costs will be can be overwhelming at first. The good news is, there are endless choices for some of the Parts, and easy ways to find answers and options.
To summarize, Part A, called ‘Hospital Insurance’, covers a majority of hospital expenses for those eligible with no monthly premiums for the consumer. Part B, called ‘Medical Insurance’, covers doctors’ appointments and more. However, this must be subscribed to within a 7-month period surrounding your 65th birthday to avoid penalties. Part B has a monthly fee assessed, at a rate determined by Medicare, and is most often taken from a person’s monthly Social Security dividend. This fee will continue to be paid by you whether you are with original Medicare, have a Medigap policy, or a Medicare Advantage Plan. Part D is the Prescription Drug Insurance which is not covered by Medicare, but by private companies. It is an obligatory requirement to have coverage, or even further monthly penalties can be assessed.
So, what is Part C? First, it should be noted that Part C is not mandatory, it is an alternative choice. While Parts A, B, & D will cover a majority of expenses, it doesn’t cover all of them. Many Medicare customers then look for plans to supplement the expenses not covered, referred to as Medigap policies. Medigap policies are only offered by private companies, and costs vary widely depending on numerous factors including deductibles, copays, out-of-pocket, prescriptions, and more. It feasible that customers under original Medicare will pay the mandatory monthly Medicare Part B fee, have a supplement policy called a Medigap plan, and a prescription drug plan, all separate costs. That’s where a Medicare Advantage Plan can be of benefit.
Medicare Advantage plans, also called ‘Part C’ or ‘MA Plans’, basically cover all Medicare services. The choices for plans are endless and may include other perks including limited dental, vision, and hearing aid benefits, and many include prescription drugs. Some even offer extras like gym memberships. Advantage policies often cover more than original Medicare does and may cost less. Best of all, the monthly charges start at $0 (yes, you heard right) and up per month based on several factors that would be determined. Customers are still required to pay the Part B monthly Medicare premium, and then whatever the chosen plan’s fees are.
There are a few things you should also know about Medicare Advantage plans. There are both HMO and PPO plans available, but each plan’s services are only applicable regionally. For example, if you live in Las Vegas, Nevada, your policy would only cover you in Clark County. If you were to travel outside of the area, coverage would be accepted at approved urgent care centers and emergency rooms, but not elsewhere. Furthermore, for those that may divide their time between several states, one would have to select a plan in the state or region where they spend at least 6 months. The original Medicare, i.e. Part A & B, can be used throughout the country wherever Medicare is accepted, and possibly any Medigap plan as well.
Medigap plans also do not work with Medicare Advantage policies. As the Advantage plan would probably cover everything the Medigap does and more, not only is it not necessary, it’s also illegal.
Having a Medigap or Prescription Drug plan in addition to an MA plan could result in disenrollment from the Advantage plan.
The other essential item to know is that these plans are based on networks. Advantage Plan members must use the providers, suppliers, and facilities within the chosen system. HMOs, of course, require referrals for anyone outside of the Primary Care Physician, while PPOs do not. The benefit to these networks is that your care can be coordinated electronically between each facet avoiding redundant paperwork and allowing one’s medical history to be available with the click of a mouse. And, like most insurances today, once a plan is obtained, it cannot be changed for that fiscal year. However, if you should decide that you want to go back to original Medicare and a Medigap policy the following year, you may sign up for a new Medigap plan at the next open enrollment period.
The ‘advantage’ of Medicare Advantage policies is that fundamentally, the plan is managing all aspects of your Medicare – and more – in what’s known as a ‘bundle’. Medicare pays these plans to supervise your healthcare for them. Your chosen plan usually covers everything except hospice services. However, original Medicare will cover those costs, even if you are on a Part C plan.
Depending on your priorities and needs, you might find that your choices are more limited within the plan’s networks as well. The doctor you have seen for 20 years may not be a part of that plan. However, when researching policy options, it is possible to find out if there is a plan available that has your favorite doctor within its system.
How does one go about getting a Medicare Advantage Plan? All Medicare-approved plans are available to compare and research on their website. The new Medicare Plan Finder https://www.medicare.gov/plan-compare/#/?year=2019 is a tool to help find the right one for you. It will ask several questions to determine age, location, and what type of plan you are looking for, and then produce results. It will allow you to enroll online, if eligible, as well. The other option is face-to-face with a certified insurance broker who has been thoroughly trained in all the products available and can answer questions and offer plans from which to choose that meet your needs.
The bottom line is that a Medicare Advantage Plan may provide more services at less cost to you but, like many HMO or PPO insurances, your choices and service areas may or may not be more limited and have more guidelines to follow.
More information about Medicare Advantage Plans can be found on the Medicare website at https://www.medicare.gov/pubs/pdf/11474.pdf . The link not only describes everything that the Part C Medicare Advantage entails, but also discusses all aspects of Medigap policies, so that you know the options and differences between both options. It is always a good rule of thumb to thoroughly research the choices ahead of time so that you can make the best decisions for you and your family.