You know about original Medicare, but you may be a little unclear about what Medicare Advantage is and why it’s different. Let’s go over what you need to know about these plans.
What are Medicare Advantage Plans?
Medicare Advantage plans, otherwise known as Part C, allows people an alternative way to receive their Medicare benefits. These plans (like HMO or PPO) are run by private insurance companies approved by Medicare.
Medicare Advantage plans will provide all your Part A (hospital insurance) and Part B (medical insurance) coverage. Most plans include Part D (prescription drug coverage), and some will offer extra benefits such as routine hearing, vision, dental care, and fitness programs. Plans also have a yearly limit on your out-of-pocket costs for all Part A and Part B medical services. Once you reach this limit, you’ll pay nothing for services Part A and Part B cover.
There are several types of plans you should know about. These plans and the basics include:
- Health Maintenance Organization (HMO) plans. These plans generally provide health care coverage from doctors, other health care providers, or hospitals in the plan’s network. Under these plans, you’ll typically have to get a referral from your primary care doctor to see a specialist or access certain forms of diagnostic testing.
- Preferred Provider Organization (PPO) plans. In these plans, you can choose from several doctors, healthcare providers, and hospitals within your plan’s network. You can also use out-of-network providers but for a higher cost.
- Private Fee-for-Service (PFFS) plans. These plans pay for a certain amount to doctors, healthcare providers, and hospitals for your care, while you also pay a certain amount.
- Medical Savings Account (MSA) plans. These plans combine a high-deductible insurance plan with a medical savings account that you can use to pay for your healthcare costs.
What’s the Difference between Original Medicare and Medicare Advantage?
Both Medicare and Medicare Advantage will fund basic health costs, including hospital stays and doctor’s visits. The costs of each plan, as well as out-of-pocket copays and other costs, will vary. Some key differences are:
- Original Medicare includes Part A and Part B only. People who want prescription drug coverage must purchase a Part D plan. As mentioned earlier, Medicare Advantage often includes Part D and may offer coverage for services Original Medicare does not (hearing, vision, and dental care).
- You can use original Medicare at any doctor or hospital that accepts the program. Medicare Advantage plans are more restricted in terms of provider network. If you go out of network, your plan may not cover your medical costs.
- Medicare Advantage out-of-pocket costs are typically lower.
- For original Medicare plans, the government sets prices for various services. You may pay a different rate with a Medicare Advantage plan based on the rate negotiated by the insurer. This rate may be higher or lower than the original Medicare rate.
Who can Join and When can They Join?
To join a Medicare Advantage plan, you must have Medicare Part A and Part B, live in the service area of the plan you wish to join, and are a U.S. citizen or lawfully present in the U.S. That’s it! The plan cannot refuse your application regardless of your health needs or pre-existing conditions.
You can only join, switch, or drop a Medicare Advantage Plan during these enrollment periods:
- Initial Enrollment – When you first become eligible for Medicare, you can sign up during your Initial Enrollment Period. For many, this is the 7 month period that begins 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65.
- General Enrollment – If you have Part A coverage and you get Part B for the first time during this period (between January 1 – March 31 each year), you can join a Medicare Advantage plan. Be aware that your coverage may not start until July 1.
- Open Enrollment – Between October 15-December 7, anyone with Medicare can join, switch, or drop a Medicare Advantage Plan.
Original or Medicare Advantage – Which do I Choose?
There is no right answer as your Medicare health plan needs depend on how much you can pay for coverage, what services you need, and what doctors you can and may want to use. While Medicare Advantage may cost you less, it also has specific service areas and may limit your freedom of choice in health care providers.
If you need help deciding and enrolling in the right plan for you, let our agents at Jeffery Insurance lend a hand. We are based in Scottsdale but are happy to assist you no matter where you are in Arizona. We are Arizona’s health care resource!