What is a Medicare Advantage Plan?

When it comes to getting your Medicare benefits, you have two choices, Original Medicare or a Medicare Advantage Plan (like HMOs or PPOs). With Original Medicare, the government covers Part A (hospital Insurance) and Part B (medical insurance). Alternatively, the Medicare Advantage Plan covers your Medicare Part A and Part B benefits through private companies that contract with Medicare. 

Medicare Advantage Plan is the health insurance plan provided by private companies and it is a single alternative to the Original Medicare Part A and Part B benefits. 

Imagine a Medicare Advantage Plan as your comprehensive health companion that includes hospital care, medical services, and often Plan D i.e. drug coverage. Let’s learn more

How Does a Medicare Advantage Plan Work?

An alternative to Original Medicare’s Part A and Part B coverage is the Medicare Advantage Plan. Private companies approved by Medicare offer these “Part C” or “MA” Plans. They follow Medicare’s rules and often include prescription drug coverage (Part D).

Different types of Medicare Advantage Plans are available. Specific instructions for accessing extra benefits and Part A and B services under your plan are provided if you have a Medicare Advantage Plan.

How Does a Medicare Advantage Plan Work?

When you enroll in a Medicare Advantage Plan, Medicare pays a set amount each month to the plan’s managing company for your coverage. These companies must adhere to Medicare’s guidelines. Medicare Advantage Plans are essentially an option for Part A and Part B coverage under Medicare.

Each year, these regulations might change. The plan must inform you of any alterations before the next enrollment year begins. If you choose a Medicare Advantage Plan, you still retain the rights and protections of Original Medicare.

What are the Different Types of Medicare Advantage Plans?

  1. Health Maintenance Organization (HMO)

These insurance policies pay for treatment and services from suppliers who are part of a predetermined network. Usually, the full cost of care received outside of the network is your responsibility.

  1. Preferred Provider Organization (PPO)

When you use health care providers in the network, these plans will cost you less than they will if you use doctors outside the network. A yearly deductible may or may not be imposed.

  1. Private Fee-for-Service Plan (PFFS)

These very unusual plans may or may not be based on a network and call for non-network providers to accept both Medicare reimbursement and the terms and conditions of the plan. Prescription medications are typically excluded.

  1. Special Needs Plan (SNP)

These programs are frequently suggested by healthcare professionals or social workers and are tailored to patients with chronic diseases like diabetes and to people who are eligible for both Medicare and Medicaid.

What Advantages Does a Medicare Advantage Plan Offer?

With a Medicare Advantage Plan, you might be able to receive coverage for items that Original Medicare doesn’t, such as some vision, hearing, and dental services (like routine check-ups or cleanings) and fitness activities (like gym memberships or discounts).

Prescription drug coverage is a common feature of Medicare Advantage (MA, commonly known as Medicare Part C) plans and is provided under Medicare Part D. The Medicare Advantage Prescription Drug (MAPD) plans stand for these arrangements. Prescription medications may be covered under private fee-for-service (PFFS) policies. To receive this benefit if your PFFS plan does not, you can enroll in a different Medicare Part D plan.

For each month an MA beneficiary is enrolled, MA plans are paid a sum known as “capitation” (payment per capita). Theoretically, capitation offers stronger incentives than FFS payment for plans to better control costs by enabling them to allocate resources to achieve quality, access, and spending goals without the limitations imposed by FFS coding and payment.

What are the Drawbacks of a Medicare Advantage Plan?

One of the Medicare Advantage plans’ main drawbacks is that you can’t choose which doctor or hospital you want to go to because of the plans’ narrow provider networks. The fact that Medicare Advantage charges are primarily based on how much medical treatment you utilize makes setting a budget for medical spending more difficult.

They could have a reduced Original Medicare plan network. Additionally, if you enroll in a Medicare Advantage plan with an HMO network, you might need your primary care physician to refer you to a specialist.

Additionally, some services and drugs require permission, and there may be additional charges associated with copays, coinsurance, and deductibles.

How Do I Choose a Medicare Advantage Plan?

There are important steps to choosing a Medicare Advantage Plan.

  • To properly match coverage, assess your healthcare needs
  • Compare prices to make sure coverage is affordable, including premiums and out-of-pocket costs
  • Make sure your favorite doctors and hospitals are available by researching provider networks and any limits

By taking into account these factors, you can make a choice that is in line with your budgetary requirements and health requirements. By doing so, you can manage costs, secure complete coverage, and preserve access to the medical specialists you know and trust.

What is the Cost of a Medicare Advantage Plan?

The cost of a Medicare Advantage plan is determined by the coverage level you select, your deductibles and copays, and the provider you choose.  Although it is anticipated that Medicare Advantage will cost an average of $18 per month by 2023, the actual cost you incur may be considerably more or lower. The plan types, copays, drug coverage, added benefits, and differences in pricing can all play a role.

Medicare Advantage plans feature an out-of-pocket maximum, which states that after a specific amount has been paid in deductibles, copayments, and coinsurance, the plan will pay for any subsequent qualified costs. The highest out-of-pocket amount allowed in 2021 is $7,550.

Most Medicare Advantage plans have no-premium or low-cost options. Compared to having Original Medicare, Part D, plus a Medigap policy, this may cost you less each month. The average monthly cost of a Medicare Advantage plan is $18, according to estimates. If you enjoy having smaller upfront costs, you might find this appealing.

What are the Restrictions on Medicare Advantage Plans?

Except for emergencies, out-of-area urgent care, and dialysis, Medicare Advantage HMO plans don’t provide providers with as much flexibility as a PPO. You could occasionally be permitted to use providers who are not in your network, but you will be responsible for paying the full cost of the services.

Your primary care physician may need to provide a letter of reference before you schedule any appointments with specialists, depending on the type of Medicare coverage you have.

Medicare Advantage plans have an out-of-pocket maximum of $12,450 for both in-network and out-of-network services combined, but not more than $8,300 for in-network services.

What are the Pros and Cons of a Medicare Advantage Plan?

Medicare Advantage Plans provide simplicity by bundling coverage and including other benefits like dental and eye care. However, they have constrained provider networks, which might limit access to preferred medical facilities. Compare doctor options and convenience.

In general, Medicare Advantage plans offer low monthly rates (on top of your Part B premium) or no-premium options. Compared to having Original Medicare, Part D, plus a Medigap policy, this may be less expensive for you each month.

For your unique scenario, Medicare Advantage offers various plan kinds. An SNP Advantage plan, for instance, can assist with your medical expenses if you have a chronic health condition. A PPO or PFFS plan may be better suitable for you if you value provider independence. Many Medicare Advantage plans include them if you desire supplemental services like dental, vision, or hearing.