One of the greatest misconceptions about Medicare is that everything is covered through Medicare Part A and Part B alone. However, that is not the case, which is why some private health insurance companies offer Medicare Advantage plans – aka Medicare Part C.
Before we get into how a Medicare Advantage Plan works, let’s review the first two parts of Medicare. Medicare Part A covers in-patient hospitalization as well as a stay at a skilled nursing facility or hospice care for the terminally ill. Medicare Part B provides payments to physicians and surgeons, as well as for medically necessary outpatient hospital services including emergency room services, X-rays, diagnostic tests and certain durable medical equipment and supplies. Original Medicare (Part A & B) claims payments are processed through the Centers for Medicare and Medicaid Services (CMS).
On the other hand, Medicare Advantage is offered by private health insurance companies who receive compensation from the federal government, but do not process claims through the CMS. The Medicare Advantage Plans then pay the doctors and hospitals that are in their network (HMO or PPO). Medicare Advantage plans are designed to help cover the expenses that Original Medicare (Medicare Part A & Medicare Part B) does not fully cover. They combine both Part A and Part B and in most cases Part D prescription drug coverage. Most people eligible for Medicare decide to choose a Medicare Advantage plan to help reduce their out-of-pocket Medicare expenses.
Medicare Advantage members generally pay a fixed amount (for example, a $25 copay) every time they see a primary care physician. Under Original Medicare, beneficiaries need to meet a deductible and pay a coinsurance – which is typically 20% of the doctor bill.
Medicare Advantage Plan must have at least the same coverage as Original Medicare, but usually covers more and may even include varying levels of coverage for such services as dental, vision and hearing.
Not only can a Medicare Advantage plan help reduce the out-of-pocket cost of health care, but some plans offer added value benefits such as health and wellness programs or customer service benefits.
One thing to keep in mind is that Medicare Advantage Plans are offered by different insurance companies. Every plan will have different premiums, copays, co-insurance and deductibles. It’s important to pay attention to these numbers versus the benefits to ensure you’re getting the most value out of your plan. For example, let’s say Plan Alpha has a $20 primary care physician copay and a $30 specialist copay. Plan Alpha requires you to see your doctor before going to a specialist. In this case, if you needed to see an Orthopedist for some knee issues, you will not only have to schedule two separate doctor appointments, but you will also have to pay TWO copays: one for your primary care physician and one for the specialist totally $50.
Now, let’s say Plan Beta has a $25 primary care physician copay and a $40 specialist copay. On this plan, the member does not need to a referral to see a specialist. In this instance, if the member needed to see an Orthopedist, that member would avoid paying the first copay and just be required to pay the specialist copay of $40.
There are only a few times of the year when you can enroll in a Medicare Advantage plan. Most notably, you can enroll in 3 months before you turn 65, the month of your birthday or 3 months after the month of your 65th birthday. If you are on Medicare and Medicaid, you can enroll at any time during the year. Otherwise, you most likely will have to enroll during the Annual Enrollment Period which occurs every year between October 15th and December 7.
Many private insurance companies offer varying degrees of Medicare Advantage Plans. Some may have no monthly premiums with higher copays while others may have a low monthly premium with lower copays. So before enrolling in any Medicare Advantage plan, do your homework. Don’t just look at the copay sheet and prices. See how the benefits align with your health needs before deciding on the best Advantage plan for you.