Medicare Advantage plans are bundled health care plans that cover most Medicare services. These plans are offered by private companies as an alternative to original Medicare.
How do Medicare Advantage plans work?
Medicare Advantage plans are considered a comprehensive alternative to original Medicare, including Part A (hospital insurance) and Part B (medical insurance), and in most cases, Part D (prescription drug coverage). Although these plans are approved by Medicare, they are provided by private companies.
Seniors can obtain Medicare coverage in two ways: original Medicare or a Medicare Advantage plan. Original Medicare is managed by the federal government and includes Part A and Part B of Medicare. If you want drug coverage, you will need to enroll in Part D. You pay a monthly premium for Part B (and Part D, if applicable), and you will be responsible for 20% of the Medicare-approved amount for the services you receive under Part B.
Similarly, if you need to fill the gaps in original Medicare coverage – for example, to cover copayment percentages and deductibles – you will need additional Medicare insurance (Medigap). Unless you have Medigap, there is no annual limit on your out-of-pocket costs.
Medicare Advantage plans include a bundled service offered by private companies regulated by the federal government that contracts with the Medicare program, which includes Part A and Part B of Medicare and usually Part D. This means individuals do not need to enroll separately in Part D. Additionally, Medicare Advantage plans may reduce your costs compared to original Medicare, although your costs will vary by plan.
But even if you have out-of-pocket costs for Part A and Part B services, Medicare Advantage plans set an annual limit on these costs. Some plans even come with benefits that go beyond what original Medicare offers, such as vision, hearing, and dental care, eliminating the need for additional insurance. In fact, you cannot get Medigap insurance if you have a Medicare Advantage plan.
Example of Medicare Advantage plans
If you choose a Medicare Advantage plan, the federal government pays the private company a fixed monthly amount to manage its share of Medicare expenses, and you pay the rest of the coverage. Each plan may charge you a monthly premium for the Medicare Advantage plan, a premium for Part B that may be partially covered by the plan, in addition to your out-of-pocket costs. For example, the plan may charge you a $10 fee each time you visit the doctor. Plans can also impose rules governing the use of the plan, such as which doctors you can see and whether you need referrals to specialists.
However, Medicare Advantage plans typically require the use of network healthcare providers, while original Medicare allows you to visit any doctor or hospital in the country. Even with a Medicare Advantage plan, you may be responsible for paying costs for items or services that the plan does not consider medically necessary. Fortunately, you can generally ask in advance whether a particular item or service will be covered.
Note: You may have seen advertisements or heard ads about additional Medicare insurance, but it is illegal to sell additional insurance to users of Medicare Advantage plans. Likewise, Medicare plans should not contact you or visit your home to try to sell you a plan without your permission. Call 1-800-MEDICARE to report any plan that does this.
Types
Medicare Advantage Health Plans
Medicare Advantage health plans work similarly to traditional health insurance. You can search for a plan that offers the features you want at a cost that fits your budget. Here are four common types of these plans:
Health Maintenance Organization (HMO) Plans
HMO plans are often the most cost-effective, but they require seniors to choose a primary care physician and see doctors only within the plan’s network. You will likely need a referral from your primary care physician. Exceptions are made for emergency medical situations and urgent care or dialysis, but outside of these scenarios, you may not be able to choose your preferred doctor.
Preferred Provider Organization (PPO) Plans
You will pay less if you stay in-network, but that is not required with a PPO plan. Furthermore, you do not have to choose a primary care doctor and usually do not need a referral to see a specialist.
Special Needs Plans (SNP)
These plans are available only to individuals with specific conditions, including chronic medical issues like dementia or other special needs. Generally, you will need to use healthcare providers within the SNP network unless you are receiving emergency or urgent medical care or dialysis. Additionally, you will typically need to choose a primary care physician and obtain a referral before seeing a specialist.
Private Fee-for-Service (PFFS) Plans
With this type of Medicare Advantage health plan, you can generally see any Medicare-approved provider, but you will pay less if you stay within the plan’s network. When receiving care, you will know how much the plan will pay for the service and how much you can expect to pay.
How Much Do Medicare Advantage Health Plans Cost?
The costs of Medicare Advantage health plans depend on the type of plan you choose, premiums, deductibles, and other costs imposed by your plan, the healthcare providers you visit, the services you receive, and their frequency.
The Centers for Medicare & Medicaid Services estimates that the average monthly premium for a Medicare Advantage health plan is $18 in 2023, down from $19.52 in 2022. Additionally, the standard premium for part B is $164.90 in 2023, down from $170.10 in 2022, although higher-income seniors may pay more. The deductible for part B is $233 in 2022, decreasing to $226 in 2023.
How to Get a Medicare Advantage Health Plan
You typically must meet three criteria to enroll in a Medicare Advantage health plan:
- Live in the service area you selected for the plan.
- Have Medicare Part A and Part B.
- Be a U.S. citizen or a legally residing immigrant in the United States.
Source: https://www.thebalancemoney.com/medicare-advantage-plans-and-how-to-get-one-4153847
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