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What is Medicare Advantage?

You must be enrolled in both Medicare Part A & B and live in the plan service area in order to enroll in a Medicare Advantage plan.

Medicare Advantage plans are called Part C of Medicare. These plans were designed to give Medicare beneficiaries a lower-premium option than Medicare Supplements plans. They also have very little Medicare underwriting. These plans often have networks and some plans may require you to get referrals to see a specialist.

Medicare Advantage plans are NOT similar to Medicare Supplement (Medigap) plans – they are very different.

Medicare Advantage, or Part C, is distinct from Original Medicare and is offered by private insurance companies. This means that you have the option to opt for this coverage on top of Original Medicare. An Advantage plan includes (but is not limited to):

  • All of the Benefits of Original Medicare

  • Long-Term and Custodial Care Not Available Under Original Medicare

  • Dental, Vision, and Hearing Care

Prescription drugs are often covered under Part C plans. Because Medicare Advantage is offered privately, this availability may change depending on your location. Medicare Advantage plans contract with the federal government and are paid a fixed amount per person to provide Medicare benefits.

Basic Medicare Advantage Things to Know…

If you are deciding between Medicare Advantage and Medicare Supplement (Medigap) plan, you'll want to consider some of the rules before you enroll.

  • Medicare Advantage plans use network doctors and hospitals for the lowest out-of-pocket costs. Plans may have HMO or PPO networks. Most Medicare HMO plans do not cover anything out of network except emergencies. In PPO networks, seeing a provider outside the network will result in higher spending for you.

  • Advantage plans may require prior authorization for certain procedures

  • You may need to obtain a referral from your primary care physician before seeing a specialist on many HMO plans

How Medicare Advantage Works

A Medicare Advantage plan is a private Medicare insurance plan that you may join as an alternative way to get your Medicare benefits. When you do, Medicare pays the plan a fee every month to administer your Part A and B benefits.

You must continue to stay enrolled in both Medicare Part A and B while enrolled in your Medicare Advantage plan. Medicare pays the Medicare Advantage company on your behalf to take on your medical risk. This is how Medicare Advantage plans are funded.

You will present your Medicare  Advantage plan ID card at the time of your doctor visits or specific treatments. Your providers will bill the plan instead of Original Medicare. You may always return to Original Medicare during the Annual Enrollment Period or during the Open Enrollment Period.

You must direct your providers to bill your Medicare Advantage plan. People who enroll in Medicare Advantage plans for Medicare are agreeing, for the rest of the calendar year, to be covered by the plan instead of Original Medicare.

Medicare Advantage Networks

Most Medicare Advantage plans have HMO or PPO networks.

Medicare HMO networks generally require to serve only with network providers, except in emergencies. You will usually need to select a primary care physician. That physician can coordinate a referral if you need to see a specialist. There are some HMO plans that offer a Point-of-Service (POS) feature where you can see out-of-network providers in certain circumstances.

Medicare PPO networks allow you to see doctors outside the network, but you may have substantially higher out-of-pocket spending to do so.

In limited counties, there are Medicare Private-Fee-for-Service plans. These plans may or may not include Part D. How you access care is also different. While this plan type was very common in the past, it has been slowly phased out in most areas.

Medicare Advantage Enrollment Periods

Enrollment periods are specific times in which someone may make changes to their Medicare Advantage plans.  There are specific rules that allow an individual the opportunity to make changes during the year and it may be important to speak with a licensed agent who can advise them; so that important deadlines are not missed.  

Special Enrollment Period (SEP)

When someone turns 65 or when someone younger than 65 receives Social Security disability and has received their benefits for at least 24 months they will have an opportunity to enroll in a Medicare Advantage plan of their choice.

Annual Enrollment Period (AEP)

Each year from October 15th to December 7th is the Annual Enrollment Period (AEP).  During this time Medicare recipients may make changes to their plan options.  They may either change to a different Medicare Advantage plan, leave Original Medicare and enroll in a Medicare Advantage Plan or leave a Medicare Advantage plan and return to Original Medicare.  Any changes made to their enrollment will take effect on January 11st of the new plan year.

If they decide to leave a Medicare Advantage plan and return back to Original Medicare, the member must notify their Medicare Advantage plan carrier. Otherwise, Medicare will continue to show them as enrolled in the Advantage plan instead of Medicare. Note: If they are returning to Original Medicare they must purchase a standalone Part D drug plan to receive their prescriptions and this will also become effective on January 1st of the new plan year.

Open Enrollment Period (OEP)

The Medicare Advantage Open Enrollment Period runs from January 1st – March 31st each year. During this time, someone may disenroll from any Medicare Advantage plan and return to Original Medicare. They will be allowed to add a standalone Part D drug plan.

Medicare vs Medicare Advantage

Here are some of the reasons a person might choose a Medicare Advantage plan:

  • Many plans have low monthly premiums (although you must continue to pay your Medicare Part B premium)

  • You pay for medical services as you use them in the form of copays and coinsurance

  • Unlike Original Medicare, Medicare Advantage plans have an out-of-pocket maximum cap to protect you against catastrophic spending

  • The convenience of having your medical and Part D drug benefits rolled into one plan

  • Some plans may include benefits for things like dental, vision, and over-the-counter benefits. Limitations, copayments, and restrictions may apply.

Remember, it's a personal choice - there is no right and wrong. Consider Original Medicare vs Medicare Advantage based on your own knowledge of your medical usage.

Medicare Advantage vs Medicare Supplement (Medigap) Plans

Without question, Original Medicare with a Medicare Supplement (Medigap) plan gives you very comprehensive coverage. The primary differences are that with Medigap plans, you can see any doctor that accepts Medicare. You don't have to ask your doctors if they take your specific Medigap insurance company. The network is Medicare, which has over 1 million contracted providers across the nation.

Some Medicare Supplement (Medigap) plans also have fuller coverage on the back end. Medicare pays 80% and your Medigap plan can pay some or all of the other 20%, depending on which Medigap plan you choose. This leaves you with little out-of-pocket. For example, a beneficiary with a Medicare Supplement (Medigap)Plan G won't have the repetitive copays at the doctor that they might incur on a Medicare Advantage plan.

However, Medicare Supplement (Medigap)  plans do not include Part D coverage, so you will need to buy a separate Part D policy. They also do not offer any routine dental, vision, or hearing while some Medicare Advantage plans may at least have a little bit of this.

Medicare and Medicaid

Medicare Special Needs Plans

Medicare Special Needs Plans (SNPs) are a type of Medicare Advantage plan that provides coordinated care to beneficiaries with specific needs or situations.

These SNPs limit their membership to beneficiaries who have specific illnesses, chronic conditions, or circumstances such as being eligible for both Medicare and Medicaid. The plans must include all of the same services as Original Medicare Parts A and B.

Special Needs Plans tailor their plan benefits, network, and drug formulary to meet the needs of individuals who have these specific health conditions or circumstances. All Special Needs Plans include a built-in Part D drug plan.

Chronic Illness Special Needs Plan

A Medicare Advantage Special Needs Plan based on health conditions is a plan that is specifically designed to provide excellent support for individuals with a chronic illness. For example, the SNP might provide access to a group of providers who specialize in treating specific illnesses.

These providers work together to coordinate your care. The plan will often assign a care coordinator or case manager to assist you with keeping healthy, managing your health condition, and following your provider’s orders. He or she might also help you with accessing community resources or getting the right prescriptions in a timely manner.

The drug formulary that is built into the plan is also likely to offer a robust list of drugs that treat this particular health condition.

To qualify for a chronic illness SNP, you must have one or more of the health conditions listed below:

  • Cardiovascular disease, stroke, or chronic heart failure

  • Alzheimer’s or Dementia

  • Diabetes

  • ESRD requiring dialysis

  • HIV or AIDS

In order for you to join a Chronic Illness SNP, your doctor will have to complete a chronic condition verification form at the time of your enrollment and return it to verify your eligibility.

Chronic Illness SNPs vary by county. Insurance companies get to choose where they will offer certain plan designs, so you may or may not be able to find an SNP in your area that specializes in the condition that you have. Check with your Medicare insurance broker to see what is offered.

Institutional Special Needs Plan (ISNP)

Medicare beneficiaries who live in an institution, such as an assisted living center, nursing home, or memory care center, may qualify for an Institutional SNP.

These plans are similar to the chronic illness SNP but instead focus on dealing with the provision of coordinated care to someone who is no longer living independently. The beneficiary must be expected to live in the institution for at least 90 days.

Dual Eligible Special Needs Plan (DSNP)

Some Medicare beneficiaries also qualify for Medicaid. Medicaid is a federal and state health insurance program for people with low incomes.

When you qualify for both, you can keep your Original Medicare and have Medicaid function as your secondary coverage, or you can enroll in a Dual Eligible Special Needs Plan.

People with full Medicaid can expect to spend little to nothing on deductibles, copays, and coinsurance for Part A and B services provided by the plan.  Many plans have a $0 premium because Medicaid pays any plan premium for you. People with partial Medicaid may have to pay some cost-sharing.

Dual Special Needs Plans often also offer rich ancillary benefits. These might include:

  • Quarterly benefits for over-the-counter products

  • Telemedicine services

  • Transportation to and from doctor appointments or trips to the pharmacy

  • Routine dental, vision, and hearing benefits

  • Gym memberships

The plan or your agent will need to verify your eligibility for Medicaid before they can enroll you into the DSNP plan.

Enrolling in an SNP

To qualify for enrollment into a Special Needs Plan, you must live in the plan’s service area and be enrolled in both Medicare Parts A and B. You will continue to pay your Part B premium to Social Security the entire time that you are enrolled in the plan (unless this is covered for you by Medicaid.)

You will also pay any monthly premium that the plan itself charges for the SNP. Finally, you will pay the regular cost-sharing expenses, such as deductibles, copays, and coinsurance. These amounts can be found in the plan’s Summary of Benefits, which you should review before joining the plan.

You can enroll in a Medicare Advantage SNP during your Initial Enrollment Period for Medicare or during any Medicare Fall Annual Election Period. Some people may also qualify for Special Enrollment Periods during the year in certain situations. These include:

  • Moving outside of your current plan’s service area

  • Qualifying for Medicaid

  • Moving into, living in, or moving out of an institution

  • Being diagnosed with a severe or chronic condition that qualifies you for a Chronic condition SNP

If you lose your eligibility for an SNP, you will have a grace period within which you can leave the plan and join another plan or return to Original Medicare.

How to know which plan is right for you?!

This varies based on a number of personal factors and there is no right or wrong answer. What's right for a friend or neighbor may not be right for you.

How Medicare Advantage Works?
Open Enrollment Periods
Medicare Special Needs Plans
Medicare vs Medicare Advantage
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