What you need to know about Medicare Advantage before you enroll
The following video will give you a good foundation of the Medicare Advantage program and Medicare Advantage Plans in particular. Understanding what an Advantage Plan is and how it works is your first step to choosing the best plan for your circumstances.
1. A Medicare Advantage Plan is not a Medicare supplement. Believing that an Advantage Plan is a supplemental policy is one of the biggest myths surrounding Medicare Advantage.
Both plans are offered by private companies, but that’s where the similarities end. When you have a supplement, otherwise known as a Medigap policy, the policy helps pay your share of Medicare-covered expenses after Medicare has paid its share.
An Advantage Plan is another way to receive your Medicare benefits and those benefits are paid by the plan. Plans receive a reimbursement from Medicare.
2. If you don’t know how Medicare Advantage Plans work you will not be able to effectively compare plans and get the most out of them.
First, to be eligible:
- You must have Medicare Parts A and B
- Live in the plan’s service area
- Not have end-stage renal disease
Plans have monthly premiums and are sometimes as low as $0 per month. You may also be subject to deductibles, copayments and coinsurance amounts when you receive services.
Plans are often network-based, such as with a HMO or PPO and most plans include drug benefits.
Plans must provide all of your Medicare Part A and Part B benefits. And many plans include extra benefits not normally included in original Medicare.
When you first become eligible for Medicare you have a 7 month window that begins 3 months prior to the first day of the month that your Medicare becomes effective.
The Annual Election Period is when you can switch, drop or enroll in a plan. This election period begins October 15th and ends December 7th each year.
There are also Special Election Periods that are often triggered by a change in your circumstances.
4. All plans are unique. Plans are offered by service area (generally a County) and premiums and benefits can vary widely between service areas. This lack of standardization makes comparing plans a little more labor intensive.
5. In the current political climate there are those who champion Medicare Advantage and those who would like to see it cut. The long-term outlook for Medicare Advantage funding is tentative at best.
Medicare Advantage pros and cons
Medicare Advantage is not for everyone. And no single plan can be labeled the best for everyone. Here are the perceived pros and cons of Advantage Plans.
- Premiums are generally lower than Medicare supplemental coverage
- Drug coverage is often included, eliminating a separate premium
- Copayments and coinsurance is often less than original Medicare costs
- Extra benefits add value
- Network restrictions may be a burden for some
- Out-of-network costs can be higher than original Medicare costs
- You may feel nickeled and dimed
- Plans are only good for one year
If you decide to enroll in a Medicare Advantage Plan, do your home work and compare plans thoroughly. Once you commit to a plan there is little opportunity to change until the following year.