Five Distinct Features of Medicare Advantage
Once a year, in the Open Enrollment Period (Oct. 15 to Dec. 7) all seniors in Medicare have the option to switch from Original Medicare to another option known as Medicare Advantage.
Unlike traditional Medicare, where the government program acts as your insurer, Medicare Advantage benefits are provided by private companies. Most are Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). The plans cover Medicare Part A costs (hospital expenses) as well as Part B (outpatient treatments), and most offer prescription drug benefits. During Open Enrollment, you can also switch to a different Medicare Advantage Plan or switch from one of these plans back to original Medicare.5 Medicare Advantage Features
Below are several features of Medicare Advantage that you should know before deciding which option is best for you.
1. Pricing and Coverage Vary
With traditional Medicare, pricing is simple. No matter where you live, you have a standard Part B premium to pay each month and uniform deductibles for hospital and doctor fees. Co-pays likewise follow a fairly rigid formula.
With Medicare Advantage, however, multiple insurance carriers are competing for patients. Recipients contribute the usual Part B premium, but they generally pay an additional premium on top of that.
Depending on where you live, you'll generally have access to multiple plans. Compare them based on premium amounts, deductibles and co-pays. The Medicare.gov website allows you to compare different plans in your area. You should also enter the medications you currently use to help calculate your estimated out-of-pocket expenses.
2. Customer Satisfaction Is Key
Cost shouldn't be the only factor when considering different health insurance options. Receiving quality care and getting reliable help with your claims also goes a long way toward ensuring a positive experience.
The Medicare website is a great re in this regard, too. It uses a star system to rate different insurers, with five representing a top mark. Among other factors, the site takes into account member experiences and how plans manage chronic conditions and provide health screenings.
Another site worth checking out is the National Committee for Quality Assurance (NCQA) website, which also ranks various Advantage plans. Consumers can quickly look up scores for customer service, prevention and treatment.
3. Watch Limits on Choosing Doctors – in Your Home State or Other States
Most private plans restrict coverage to certain doctors and medical facilities or, in the case of a PPO, charge more for out-of-network providers. That means, if you have specific health care professionals you'd like to see, you'll want to check whether they're part of the system ahead of time.
This feature can also complicate things for people who live in another state for part of the year or travel frequently. They could find that their plan refuses coverage if they get sick while out of town – or charges considerably more.
4. Out-of-Pocket Expenses Are Capped
One of the major benefits of Medicare Advantage is that there's a cap on the out-of-pocket expenses a recipient has to pay in a given year. Under the Affordable Care Act, that limit is $6,700 annually. Traditional Medicare coverage has no such cap, so there's always a risk that patients will have to pay more if they require significant care.
5. You May Need to Wait for Open Enrollment
When people first sign up for Medicare, they're automatically enrolled in the traditional program. Those who prefer a private plan can join Medicare Advantage at that time. Otherwise, they have to wait for the open enrollment period between Oct. 15 and Dec. 7 each year to make the switch. However, if you decide you don't like the plan, you have a separate Medicare Advantage Disenrollment period (Jan. 1 to Feb. 14) to switch back to original Medicare and enroll in a Part D Prescription Drug plan.The Bottom Line
Whether Medicare Advantage is right for you depends on your unique circumstances. Checking out the Medicare website is a good way to get the details on plans in your area, including pricing and quality ratings. Remember to consider where you'll need healthcare, as well as which doctors you'd prefer to visit, when deciding which way to go.
To read about traditional Medicare and Medigap – the alternatives to Medicare Advantage – see Medicare 101: Do You Need All 4 Parts? and Medigap Vs. Medicare Advantage: Which Is Better? These articles will also update you on Medicare Part D, the prescription drug program for seniors. (Many Medicare Advantage plans include Part D coverage.)