Are Medicare Advantage Plans Worth It
Medicare Advantage plans are certainly worth the zero-dollar premium however, its your choice to decide if the coverage is right. The value of an Advantage plan depends on your location, healthcare needs, budget, and preferences.
Some healthy people live in prime Medicare Advantage areas, and they prefer to pay as they go. But at the same time, people do leave Medicare Advantage plans for good reasons.
Supplemental Coverage Among Beneficiaries With Basic Medicare
|No supplemental coverage||19%|
In that situation, unless you have some type of employer-sponsored insurance or you get extra coverage from Medicaid, the option for mitigating your out-of-pocket costs is a Medigap policy.
Those supplemental policies, which are sold by private insurance companies, either fully or partially cover cost-sharing aspects of Parts A and B, including deductibles, copays and coinsurance. They also limit what you’ll pay out of pocket each year.
Yet about 19%, or 6.1 million, who stick with basic Medicare have no extra coverage, according to a 2018 study from the Henry J. Kaiser Family Foundation.
That’s risky, experts say. While Part A is free for most beneficiaries, it comes with a $1,364 deductible per benefit period. And although Part B comes with a low $185 per-year deductible, you typically pay 20% of the remainder for most doctor services including while you’re a hospital inpatient as well as outpatient therapy and durable medical equipment such as wheelchairs or walkers.
“That 20% is after your deductible, and there’s no limit to how much you’d pay out of pocket,” said Elizabeth Gavino, founder of Lewin & Gavino in New York and an independent broker and general agent for Medicare plans.
“If you have a heart attack, need multiple surgeries and hospital visits, you could literally end up bankrupt,” she said.
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How To Enroll In A Medicare Advantage Plan
Once youve done your research and found a Medicare Advantage plan that fits your needs, there are various ways to enroll:
Use Medicares Plan Finder to find the plan in your area. Click on Enroll.
Go to the plans website to see if you can enroll online. Contact the plan to get a paper enrollment form. Fill it out and return it to the plan provider.
You will need your Medicare number and the date your Medicare Part A and/or Part B coverage started. You must be enrolled in Medicare Parts A and B before you can buy a Medicare Advantage plan.
Keep in mind that you can only enroll in a Medicare Advantage plan during your Initial Enrollment Period or during the Open Enrollment Period from Oct. 15 to Dec. 7. Once youre enrolled in a Medicare Advantage plan, you can switch plans during Medicare Advantage Open Enrollment from Jan. 1 to March 31 each year.
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Which One Is Better
Both Medicare Advantage and Medigap provide advantages and disadvantages.
Some advantages of Medicare Advantage include:
- More coverage and benefits, which can include services like gym memberships, long-term care, and disability equipment
- Lower premiums
- An all-in-one plan which covers Medicare Part A, B, and D
Some disadvantages of Medicare Advantage include:
- Having to make sure your preferred provider is in your plan
- No coverage while traveling
- A likelihood of higher out-of-pocket and emergency costs
Some advantages of Medigap plans include:
- Fewer out-of-pocket expenses
- Access to all providers who accept Medicare
- Coverage while traveling overseas
Some disadvantages of Medigap plans include:
- Higher monthly premiums
- Having to navigate the different types of plans
- No prescription coverage
Do You Really Need A Medicare Supplemental Insurance Plan
Adding a Medigap supplement insurance policy to your Original Medicare coverage can help reduce your out-of-pocket costs, including deductibles and copays. Medigap policies are voluntary and have monthly premiums.
Coverage Gaps in Original Medicare
People can receive Medicare benefits in one of two ways: Original Medicare or Medicare Advantage.
Original Medicare, also known as traditional Medicare, consists of Part A and Part B. At age 65, you can automatically be enrolled or manually enroll in Original Medicare.
Original Medicare has several out-of-pocket costs, including monthly premiums, annual deductibles and copayments for doctor services.
Unlike Medicare Advantage, there is no yearly out-of-pocket maximum in Original Medicare.
These gaps in Original Medicare insurance can quickly add up, especially if youre in poor health or on a fixed budget.
2022 Original Medicare Out-of-Pocket Costs at a Glance
- 20 percent of all Part B services, including doctor visits, durable medical equipment and outpatient therapy
- $1,556 Part A hospital deductible for each benefit period
- $233 Part B deductible
- $170.10 monthly Part B premium
Most people dont pay a monthly premium for Medicare Part A. But if you didnt work enough before turning 65, you may face this extra fee, which can cost up to an additional $499 a month.
There are also several coverage gaps in Original Medicare. For example, vision, dental and hearing are not covered unless deemed medically necessary.
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Medicare Advantage Vs Medigap
Medicare Advantage plans are sometimes confused with Medicare Supplement Insurance, also known as Medigap. Both are offered by private insurance companies, but the way your expenses are covered is different. As the name suggests, Medigap plans cover the gaps in Original Medicare by covering your share of covered charges. When you seek medical care, most or all of your cost-share will be covered by your Medigap plan. For this, you’ll pay a monthly premium.
Medicare Advantage plans, by contrast, are bundled plans that include the same coverage you’d get with Medicare Part A and Part B , plus often limited coverage for other things, like some dental services or an allowance for some over-the-counter drugs. You may pay a premium for a Medicare Advantage plan, but many are offered at no premium beyond your required Medicare Part B premium. Youll pay copays or coinsurance when you seek medical care. With a Medicare Advantage plan, youll pay out of pocket whenever you see a provider, and theres an out-of-pocket limit of $7,550 on covered care in 2021.
Also, because Medigap policies are standardized, its relatively easy to compare costs. Every Medicare Advantage plan is different, so comparison shopping can be difficult. You cant have both a Medicare Advantage plan and a Medigap plan at the same time.
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Only 19% of Original Medicare beneficiaries have no supplemental coverage .
- Supplemental coverage can help prevent major expenses.
If youre approaching Medicare eligibility, youve probably heard about the various private-coverage options that are available to replace or supplement Medicare. These plans are popular, but are they necessary?
The answer is: It depends.
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Medicare Advantage Open Enrollment Period
If you decide that you are not happy with your MA plan, you have a few options.
You can switch to a different type of plan during the Annual Enrollment Period, or you may be eligible for the Open Enrollment Period .
If you realize that the plan you chose does not actually cover everything you want, or your doctor is not in your network, you can make one change from January 1 through March 31.
During the OEP, there are only a few types of changes you can make. You can switch from one MA plan to another MA plan, or you can switch from a MA or MAPD plan back to Original Medicare with the option to add Part D.
Why Buy More Insurance
As noted above, Medicare isn’t a blanket insurance policy. This means it does have holes in it. Original Medicare, as the government calls what we now know as Parts A and Band Medicare prescription drug coverage, Part Dpays most of your expenses.
But it’s far from all of the costs you may face if you become seriously ill or get injured. Even routine services come with copayments and deductibles. This is where Medigap insurance kicks in.
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Home Health Nurses And Telehealth
Beginning in 2018, MA plans began to offer coverage for doctor house calls, home nurses or aides to help with dressing and daily activities, over-the-counter pharmacy products, and non-emergency transportation .
Transportation services are usually offered through third-party companies that your health plan is contracted with, so be sure to contact a company that your plan covers to make sure youre covered.
MA plans now offer non-skilled home care for services that do not require a licensed doctor or nurse practitioner. Those services can include things like home cleanup and meal delivery.
Telehealth services are another new benefit that MA plans can offer. Using telehealth, people who cannot leave their home either for medical reasons or for lack of transportation to easily access healthcare online.
If your plan allows telehealth, there will be a list of telehealth providers you can use that will allow you to speak to doctors over the phone or via video chat.
One of the big advantages to telehealth is that doctors are often able to prescribe medications without you having to travel to their offices. In many cases, you can then have those prescriptions delivered through CVS Pharmacy or any other mail-order pharmacy.
How Do You Decide
âMake sure you have enough coverage to limit your financial liability in case of catastrophic injuries or disease,â Nance says. âWhile the plans that have better benefits often cost more, they will usually save you in the long run in terms of out-of-pocket fees.â Nance further recommends speaking to family and friends to compare experiences.
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Rules For Medicare Advantage Plans
Medicare pays a fixed amount for your care each month to the companies offering Medicare Advantage Plans. These companies must follow rules set by Medicare.
Each Medicare Advantage Plan can charge different
. They can also have different rules for how you get services, like:
- Whether you need areferralto see a specialist
- If you have to go to doctors, facilities, or suppliers that belong to the plan for non-emergency or non-urgent care
These rules can change each year.
Costs For Medicare Advantage Plans
What you pay in a Medicare Advantage Plan depends on several factors. In most cases, youll need to use health care providers who participate in the plans network. Some plans wont cover services from providers outside the plans network and service area. Learn about these factors and how to get cost details.
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Do Most Doctors Accept Medicare Advantage Plans
People with Original Medicare have access to doctors throughout the United States. Its estimated that about 93% of all primary care providers accept Medicare.
However, with MA plans, things work a bit differently. Not every doctor who accepts Original Medicare will accept patients with an MA plan, and vice versa.
You may be covered out-of-network for emergency room and urgent care at in-network rates, but things can quickly get complicated on the billing side of things.
Per CMS, all MA plans must include an adequate number of providers and hospitals in their networks. If you have to seek routine care from an out-of-network provider, your insurer may cover services at in-network rates if an appropriate provider is not available in-network.
Choosing My Type Of Medicare Coverage
Your first decision when it comes to health coverage after 65 is between Original Medicare and Medicare Part C.
Original Medicare covers most hospital and doctor expenses. The balance is left to you, with no cap on how high your out-of-pocket costs can go.
Original Medicare allows you to see any doctor in the U.S. who accepts Medicare. It provides excellent flexibility: it has no networks or referral requirements.
Medicare Part C bundles hospital, doctor and drug coverage. It covers most of those expenses, but you pay deductibles, copayments, and coinsurance. Medicare Advantage plans cap out-of-pocket expenses.
Medicare Advantage is all-encompassing, even offering dental and vision coverage . But, you are limited to its doctor network and need referrals to see specialists.
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The Pros And Cons Of Medicare Advantage
These popular plans may carry hidden risks. Heres what to know.
If youre one of the 63 million Americans enrolled in Medicare, youre probably being deluged by marketing pitches for Medicare Advantage plans, which offer managed care with low or zero premiums.
Medicares fall open enrollment season starts Oct. 15 and runs through Dec. 7, when you can switch your coverage between Original Medicare and Medicare Advantage, change Medicare Advantage plans, or make changes to your prescription drug plan.
All that marketing seems to be working. Recently, 42 percent of Medicare beneficiaries were enrolled in Advantage plans, up from 31 percent in 2016, according to data from the Kaiser Family Foundation. Those numbers include 50 percent of Black and 54 percent of Hispanic enrollees vs. 36 percent of whites in 2018. By 2025, half of Americans are expected to be in Advantage plans.
Its easy to see the appeal of Advantage. Original Medicare doesnt cover all your medical expenses, while Advantage plans have cost-sharing requirements but then cap your out-of-pocket costs. Plus, you have low premiums and the simplicity of all-in-one coverage.
But there can be hidden risks to Advantage plans, especially for those with major health issues.
Some people in Medicare Advantage end up paying unexpectedly high costs when they become ill or find their network lacks the providers they need, says Tricia Neuman, senior vice president at Kaiser.
Dental Vision And Hearing
In most cases, Original Medicare does not cover dental, vision, and hearing services. The exception for these is if they are related to hospital stays for another reason, in which case, Part A may pick up the costs.
Although exact benefits will vary by plan, MA plans can offer a variety of dental benefits such as
dental exams and cleanings, x-rays, fillings, extractions, root canals, crowns, and even dentures in some cases. There are usually copayments associated with these services.
MA vision benefits can cover exams, glasses, and sometimes contact lenses.
MA hearing benefits generally include exams and hearing aids.
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Which Plan Is Best
Heres the short answer: If you want 100% coverage of everything, an F or G plan is your choice. The other plans offer progressively less coverage for lower upfront costs.
For a more detailed answer, you can do one of the following:
- Speak with a qualified insurance agent or Medicare advisor to find the plan that fits you.
- Read the Medicare publicationChoosing a Medigap Policy, where youll find descriptions of each policy type and what it covers.
Pitfalls Of Medicare Advantage Plans
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A Medicare Advantage Plan, also called a Part C or an MA Plan, may sound enticing. It combines Medicare Part A , Medicare Part B , and usually Medicare Part D into one plan. These plans cover all Medicare services, and some offer extra coverage for vision, hearing, and dental. They are offered by private companies approved by Medicare.
Still, while many offer low premiumssometimes as low as $0 per monththe devil is in the details. You will find that many plans unexpectedly won’t cover certain expenses when you get sickresulting in unforeseen out-of-pocket costs for youand what they pay can differ depending upon your overall health. Here’s a look at some of the disadvantages of Medicare Advantage Plans.
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Medicare Advantage In A Nutshell
When you enroll in Medicare — which you can do at age 65 — you can choose either the “original” Medicare package of Part A and Part B or a Medicare Advantage plan, sometimes referred to as Part C. Those who opt for original Medicare typically augment it with Part D prescription drug coverage and sometimes a “Medigap” supplemental coverage plan, too.
Medicare Advantage plans debuted in 1995. Offered by private organizations such as health insurance companies and regulated by the federal government, they are required to offer at least as much coverage as original Medicare .
During any Medicare enrollment period, you can choose between original Medicare and Medicare Advantage plans. And if you’re not happy with your decision, you can make a different choice in the next enrollment period.
Why You Might Not Want A Medicare Advantage Plan
Here are some downsides:
When it comes to choosing the best health insurance plan in retirement, there’s no one-size-fits-all solution. Look into all your options and see which makes the most sense for you. Do the math, comparing premiums, copays, deductibles, and so on — to see which plan is likely to cost you the least and/or offer more coverage.
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When Can I Enroll
The Medigap Open Enrollment Period covers six months. It starts the month you are 65 or older and are enrolled in Medicare Part B. In this period, no insurer offering supplemental insurance in your state can deny you coverage or raise the premium because of medical conditions. At any other time, you would have to qualify for a Special Enrollment period to have the same rights.
Except in a few states, if you apply outside this period, you will undergo underwriting by the insurance company. The insurer could then exclude, refuse or charge more for a policy due to your existing health conditions. Again with the exception of some states, this also happens if you change from one Medigap plan to another later.