Medicare Advantage Plans (Medicare Part C)Updated February 4, 2016 Medicare
The two main ways to get Medicare coverage: choosing Original Medicare (Part A and Part B) or by selecting a Medicare Advantage Plan (Part C).
Original Medicare vs. Medicare Advantage Plans
Original Medicare consists of Part A and Part B. Part A is hospital insurance and it helps cover the costs of inpatient care while in the hospital, skilled nursing facility care, hospice care, and home health care. Medicare Part B is medical insurance and it helps cover the costs of services from doctors and other health care providers, outpatient care, home health care, durable medical equipment, and certain preventive services
Medicare Advantage Plans—such as Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs) and Private-Fee-for-Service (PFFS) plans—are health plans offered by private companies but approved by Medicare. If you select a Medicare Advantage Plan, your insurance is still provided under the Medicare program, but it is through a private company.
Check Your Eligibility
What Medicare Advantage Plans Cover
Medicare Advantage Plans must cover all of the Medicare Part A and Part B benefits except hospice care. (Original Medicare will cover hospice care for those in a Medicare Advantage Plan.) Medicare Advantage Plans also cover emergency situations and urgently needed care.
Furthermore, certain Medicare Advantage Plans cover services that are not offered under Medicare Part A and Part B. For example, Medicare Advantage Plans often offer vision, hearing, and/or dental coverage. Also, many Medicare Advantage Plans include prescription drug coverage as part of their plan.
How Medicare Advantage Plans Work
Basically, with a Medicare Advantage Plan, you are still enrolled in Medicare, but you have a private health insurance plan. Each month, Medicare pays a fixed amount for your care to the company offering your Medicare Advantage Plan.
Under the program, the companies that offer Medicare Advantage Plans must adhere to certain rules regarding the care and procedures that are covered. However, they can charge different amounts for services and have different rules about how services are provided. For example, one plan might require you to make a copayment when you visit a doctor, while another plan might not have this requirement.
Enrolling in a Medicare Advantage Plan
If you want to join a Medicare Advantage Plan, you first must sign up for both Medicare Part A (hospital insurance) and Part B (medical insurance). (Those individuals suffering from end-stage renal disease typically cannot enroll in a Medicare Advantage Plan, though there are certain exceptions.)
Check Your Eligibility
Medicare Advantage Plan Premiums and Other Costs
With a Medicare Advantage Plan, you may be required to pay a monthly premium in addition to the Part B premium (which, in most cases, is currently $104.90 each month, so long as you enroll in Part B when you are first eligible). The average Medicare Advantage Plan premium in 2015 was $32.91 per month and is averaging around $32.60 per month in 2016. Some plans, though, offer $0 premiums. Plan costs, as well as covered benefits, can vary from year to year and from plan to plan.
The actual out-of-pocket expenses that you will have under a Medicare Advantage Plan depends on many factors, such as:
- the monthly premium amount
- whether your plan covers any of the Part B premium
- the amount of the deductible (assuming there is one)
- copayments or coinsurance
- which health care services you need and how often you need them
- whether you stick to the rules of the plan (for example, you only visit providers that are within your network)
- the out-of-pocket limit for medical costs, and
- whether you get Medicaid or other forms of assistance from the state.
Each year, the various insurance companies offering Medicare Advantage Plans determine how much they will charge for premiums, deductibles, and services. The amounts you will have to pay under the plan can change only once a year, on January 1.
Medicare does not have a say in how much is charged.
When You Can Enroll in a Medicare Advantage Plan
You can enroll (or change your existing coverage) during certain enrollment periods that occur each year.
- You can enroll in a Medicare Advantage Plan during your initial enrollment period (that is, when you first become eligible for the Medicare program or when you turn 65 years old).
- You can enroll between October 15 through December 7. This is the open enrollment period for changing a Medicare Advantage Plan. During this time frame, you can join, change, or drop a Medicare Advantage Plan.
- For those who already have Part A, and then get Part B for the first time during the general enrollment period (January 1 through February 14), you can join a Medicare Advantage Plan between the dates of April 1 to June 30.
- You can also enroll in a Medicare Advantage Plan during certain “special” enrollment periods. (To qualify for a special enrollment period, you must meet certain qualifications such as you moved out of your plan’s service area or your plan changed its contract with Medicare, for example.)
- Those who are already enrolled in a Medicare Advantage Plan can change to Original Medicare (Part A and Part B) between the dates of January 1 to February 14. (This is called a “Special Disenrollment Period” and it is the time when you can leave a Medicare Advantage Plan. Those who opt out of a Medicare Advantage Plan during this time frame must change to Original Medicare, not a new Medicare Advantage Plan. It’s not possible to choose a new Medicare Advantage Plan at this time.)
- It is possible to change to a 5-star Medicare Advantage Plan (or Medicare Cost Plan, or Medicare Prescription Drug Plan) one time, between the dates of December 8 and November 30 if one is available in your area. (Medicare takes the information that it gathers from member satisfaction surveys, plans, and health care providers to rate the plans. A plan gets a rating of between 1 and 5 stars. Plans that are rated as “5-star” are considered excellent.)
During these enrollment periods, it is a good idea to review your coverage choices and ensure that you have picked options that best meet your needs, and make changes if necessary. On the other hand, if you’re happy with your current coverage, you do not need to do anything.
Medigap Policies vs. Medicare Advantage Plans
If you choose to enroll in a Medicare Advantage Plan, you will not be able to use Medicare Supplement Insurance (called “Medigap”) to pay for out-of-pocket costs.
What is a Medigap policy? A Medigap policy is an insurance policy that can help pay some of the costs that Original Medicare does not cover, such as copayments, coinsurance, and deductibles.
What is the difference between a Medigap policy and a Medicare Advantage Plan? The difference between a Medigap policy and a Medicare Advantage Plan is that Medicare Advantage Plans provide a way to obtain Medicare benefits, whereas a Medigap policy only acts as a supplement to Original Medicare to cover certain out-of-pocket expenses.
If you are signed up for a Medicare Advantage Plan, you are not eligible for a Medigap policy. In most cases, you can generally get a Medigap policy if you disenroll from the Medicare Advantage Plan and switch back to Original Medicare.
Top Ten Things to Keep In Mind About Medicare Advantage Plans
Here are the ten most important things to remember about Medicare Advantage plans.
- Medicare Advantage Plans are part of the Medicare program, even though they are through private companies. This means you still have Medicare rights and protections.
- Complete Part A and Part B coverage is provided through Medicare Advantage plans.
- You are only allowed to enroll in a Medicare Advantage Plan at certain times of the year. Once you enroll, you are typically in the plan for a year.
- You should evaluate several Medicare Advantage Plans before enrolling in a particular plan to compare what is covered, as well as what your potential costs will be.
- If your plan quits the Medicare program, you must enroll in another Medicare health plan or switch back to Original Medicare.
- To avoid higher costs under a Medicare Advantage Plan, you need to follow the rules. If your plan requires a referral before seeing a specialist, you will need to get a referral to avoid paying more. Also, the specialist must also be in the plan's network. If you don’t stay within your plan’s network, you might have to pay more for the services, or they might not be covered at all.
- You can’t get or use a Medigap policy if you enroll in a Medicare Advantage Plan.
- Your health services provider could leave the plan’s provider network anytime during the year, which means you might need to choose a new provider.
- Medicare Advantage Plans may not charge you more than Original Medicare for certain services (such as chemotherapy or dialysis).
- There is a yearly limit on out-of-pocket costs for medical services when it comes to Medicare Advantage Plans. After you get to this limit (which varies between plans and can change each year), you don’t have to pay anything for covered services.