There are a lot of questions about Medicare Advantage Plans, commonly referred to as Part C, what they cover, and how much they can cost.
Medicare Advantage Plans are government-approved private insurance plans designed to provide you benefits as an alternative to Medicare. Unlike standalone Medicare, which has no cap on out-of-pocket expenses, Advantage Plans provide comprehensive coverage that may sometimes offer more benefits than traditional Medicare. Advantage Plans are classified into 4 categories: Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO), Private Fee for Service (PFFS), and Special Needs Plans (SNP).
Although there is a lot of information around Part C, Medicare Advantage Plans are pretty easy to understand.
Keep reading to learn more.
1: Advantage Plans in a Nutshell:
Medicare Advantage Plans are often called Part C of Medicare.
These are plans sold by private insurance companies approved by Medicare to cover most of your Part A (hospital) and Part B (medical) services.
They help pay for things like major hospital stays, doctor visits, preventative care, lab work, meal delivery services, and most Advantage plans even include coverage dental.
Unlike Medicare Supplements, Advantage Plans are the easiest way to get comprehensive coverage at the lowest cost.
2: Medicare Advantage Plans Are an Alternative to Traditional Medicare.
Some plans offer additional coverage normally not available with Traditional Medicare that helps lower out-of-pocket medical expenses (like dental and eye care).
Although they are managed by Medicare, coverage is through private insurance companies.
You’ll need to make sure your doctor, hospital, and pharmacy are covered by the plan you are considering.
3: Everyone Who Is Medicare Eligible Can Get an Advantage Plan.
If you are eligible for both Medicare Part A and Part B, you are automatically eligible for a Medicare Advantage Plan – if there is any available in your area.
Medicare Advantage Plans are not available everywhere, as different plans cover different service areas.
It is important to choose a plan that covers your current doctor and hospital.
4: What Do They Cover?
Medicare Advantage Plans cover you for some of your Part A (hospital) and Part B (medical) services.
Not all Advantage Plans typically include Part D prescription drug coverage.
If you choose an Advantage Plan that does not include prescription drug coverage, you will have to enroll in a separate Part D Plan.
Some Advantage Plans do not allow separate drug coverage. You’ll need to make sure you are careful about which plan you are choosing.
Keep reading to learn how to choose the right Medicare Advantage Plan for you.
5: Many Advantage Plans Also Include Additional Benefits That Are Not Usually Covered by Medicare, Such As:
- Dental, vision, and hearing benefits
- Gym Memberships
- Transportation to and from medical appointments
6: There Are 4 Types of Advantage Plans.
There are several types of Medicare Advantage Plans that each work differently. Some of the most common are:
- Health Maintenance Organizations (HMO)
- Preferred Provider Organizations (PPO)
- Special Needs Plans (SNPs)
- Private Fee-for-Service Plans (PFFS)
Continue reading to see how each of these types of plans work.
7: Health Maintenance Organizations (HMOs)
In this type of plan, you are required to receive routine medical care from a provider who is in the plan’s network.
In most cases, you have to stay in-network.
If you receive care out-of-network if you need emergency treatment or urgent care treatment outside your plan’s service area you may end up not having any coverage.
If you choose to receive routine care from an out-of-network provider, you’ll end up paying the full amount for the services you receive.
You generally must choose a primary care doctor who is within the plan’s network.
If that doctor leaves the plan’s network, you will have to select another primary care doctor.
If you want to see a specialist, such as a cardiologist or a gastroenterologist, you will need a referral.
Services need to be approved prior to treatment. If you receive these services without prior approval, you could end up paying the full amount.
When choosing an HMO, make sure EVERY doctor/specialist you see is within the plan’s network, prior to signing up for the plan.
8: Preferred Provider Organizations (PPOs)
In this type of plan, you pay less if you receive medical care from providers in the plan’s network. Unlike an HMO, where you HAVE TO go within the network. PPOs let you see doctors and providers outside the plan’s network.
If you choose to receive care from an out-of-network provider, you typically have higher out-of-pocket costs. But not the full amount.
You do not need to choose a primary care doctor but your costs may be lower if you choose one within the plan’s network.
You do not always need a referral to see a specialist. However, you will pay more if you receive services out-of-network.
Like an HMO plan, it is recommended to check that all your doctors and providers are within the network prior to signing up. Not doing may result in higher medical expenses that otherwise could have been avoided.
Working with a licensed broker is the easiest way in picking a plan.
Make sure your broker represents multiple companies. This way you can look at multiple plans and pick one that best meets your needs.
If you need help picking an agent, read about that here.
9: Special Needs Plans (SNPs)
These plans are designed for certain groups of people, or people with specific diseases or conditions, like diabetes or heart failure.
If you have one of the conditions or illnesses that makes you eligible for this type of plan, you typically must receive routine medical care from a provider in the plan’s network.
Generally, you must pick a primary care doctor or someone to coordinate all the care and services you receive from any provider.
You will likely need a referral to see a specialist who is in the plan’s network.
10: Private Fee-for-Service (PFFS) Plans
In these plans, the insurance company has negotiated rates with providers to determine what you and the plan will pay for your care.
If the plan has a network, you will pay less if you see a provider that participates in that network.
You can see providers who are out-of-network if they agree to the plan’s terms. However, not all providers will, and you will most likely pay more.
You can receive treatment anywhere in an emergency situation.
You are not required to choose a primary care doctor, but you do not need referrals to see specialists.
11: You’ll Have Out-Of-Pocket Costs
Out-of-pocket costs vary from one plan to the next. Here are some out-of-pocket expenses you can have on an Advantage Plan:
- Monthly Premium
- Out-of-Network Costs
- Maximum Out of Pocket
Let’s Talk About the Different Parts of Medicare Advantage Plans Individually.
12: There Is a Monthly Premium
Many plans have different monthly premiums.
Certain plans will reimburse some or all of your Part B monthly premium.
13: They Have Annual Deductibles
Some plans have a deductible. The lower the deductible, the faster your coverage will start.
Picking a plan with the lowest deductible minimizes out-of-pocket expenses.
14: Every Plan Has a Copay
The copay for a service or visit on one plan can be very different from one plan to the next.
Usually, every service has a specific copay.
When choosing a plan, first determine what services you will need coverage for the most, then pick a plan that has the lowest copay for those services.
15: If You Go Out-Of-Network, Costs Are Higher
On some plans, you will have higher costs if you see out-of-network providers, while on other plans, you could be responsible for the full amount.
Try staying within the plan’s network to lower out-of-network costs.
Again, make sure your doctors are within the network before picking a plan.
16: Out-Of-Pocket Costs Have a Maximum
Each plan puts a limit on your yearly out-of-pocket. Once you have reached this limit, the plan pays 100% of any costs you incur for the remainder of the year.
These out-of-pocket cost limits change every year.
Pay attention to the literature your company sends. Benefits may change from one year to the next.
Let’s use an example to show out-of-pocket costs on Part C:
Anita has a Premier PPO Plan from Humira Gold Company (I made this up, no such thing exists).
This plan has no monthly premium and no deductible.
Anita has a $30 copay for specialist visits but no copay for her primary care doctor visits.
This plan has a network, but Anita can go to out-of-network.
Anita’s maximum out-of-pocket for the year for in-network services is $5,900.
If she goes out of network, her out-of-pocket could reach $10,000.
Anita’s friend George has a Gold HMO Plan from HAARP Advantage Plus (another made-up name). He lives one county over.
He likes Anita’s plan but it was not available in his area when he went to go sign up.
His plan has a monthly premium of $28 and no deductible.
George has a $45 copay for specialist visits and a $5 copay for his primary care doctor visits.
This plan has a network, and if George goes out of network, he will pay the full amount.
George’s maximum out-of-pocket for the year is $6,700.
Notice that the plans are all very different and specific to where George and Anita live. Although Anita’s plan is more comprehensive, it is not available to George.
17: You Can’t Enroll Whenever You Want.
There are certain times during the year when you can enroll in a Medicare Advantage Plan or switch plans if you already have an Advantage Plan.
Some of these periods are called
- Initial Enrollment Period (IEP)
- Annual Enrollment Period (AEP)
- Medicare Advantage Open Enrollment Period (MA OEP)
18: Initial Enrollment Period (IEP)
This is the period, which lasts seven months, that begins three months before the month in which you turn 65, includes the month in which you turn 65, and ends three months after the month in which you turn 65.
19: Annual Enrollment Period (AEP)
This is between October 15th and December 7th of each year.
During this period, you can switch from one Advantage Plan to another.
You can also come off Medicare Part A and Part B and any other additional coverage and switch to an Advantage Plan.
Any Advantage Plan you enroll in during this period will begin on January 1st of the coming year.
20: Medicare Advantage Open Enrollment Period (MA OEP)
This is between January 1st and March 31st of each year.
During this period, you can switch to another Advantage Plan if you already have one.
Most people use this period after they’ve had a chance to use the coverage they’ve chosen if they decide that the coverage is not right for them.
You are allowed to make only one change during this period.
Some of the things you can do during this period:
- You can switch to a different Advantage Plan
- Go back to Traditional Medicare
- Drop the Medicare Advantage Plan and buy a drug plan
Any Advantage Plan you enroll in during this period can only begin as early as the first of the month following the month you enroll.
Read more about enrollment periods here.
Here’s an example to show how Part C minimizes out-of-pocket expenses:
Let’s refer back to Anita, who has the Humira Gold Company Plan.
She woke up in the middle of the night with bad stomach pain. Because of this, she went to the emergency room.
Two days later, she had a follow-up visit with a gastroenterologist who recommended gallbladder removal surgery.
He performed the surgery the following week.
- A $90 copay for the emergency room visit
- A $30 to the gastroenterologist
- A $200 copay for the gallbladder removal surgery
If Anita had only Medicare Part A and Part B, she would have paid:
- Her Part B deductible of $233 (in 2022)
- An emergency room visit copay plus 20% of the cost of any services received during the visit after the deductible.
- 20% of the cost of the follow-up visit with the gastroenterologist.
- 20% of the cost of the gallbladder removal surgery, which can be upward of $30,000.
- Excess charges if any of the providers who treated her do not accept Medicare assignment
As you can see, because Anita has Part C coverage, her gallbladder attack and surgery cost around $320.
If Anita did not have any coverage in addition to Medicare Part A and Part B, her costs could have been well over $7,000.
21: Always Make Sure Your Doctor and Drugs Are Covered.
When choosing a Medicare Advantage Plan, it is important to find a plan that covers all of your doctors and prescriptions.
You can search for plans on sites like PartCEnrollmentCenter.com.
Make sure you customize your search by entering your
- Zip Code
- County you live in
- Current Medication
Remember to check and make sure that most of your providers and services are covered.
Having an Advantage or Part C Plan can help minimize out-of-pocket medical expenses when you have Medicare.
There are several ways to minimize out-of-pocket costs, and Part C is just one of those ways.
We will talk about some of the other ways to reduce costs in other posts.
If you have any questions, use the search tool at the top of this page or on the home page.
Or if you would like further detail on any of the topics we discussed, please fill out a contact form and submit your questions.
If you prefer to speak by phone, call us at 888-209-5049.
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