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What Do You Need To Know

    Medicare Advantage Plans

    Retirement comes with increasing medical bills, and while it’s a stage of life to look forward to, it’s also important to consider how you’ll cover these bills. Medicare is one of the most common and widely used programs, but it doesn’t always cover the total cost of your bills. So consider other options, like Part C, a Medicare Advantage plan, which may be helpful.

    What is a Medicare Advantage Plan?

    A Medicare Advantage plan is like a medicare supplement: an alternative method of receiving Medicare Part A and Part B coverage. This type of medicare supplement plan is sometimes referred to as Part C because they are separate plans approved by the Medicare program but offered through private insurance companies.

    Who is Eligible for Medicare Advantage Plans?

    If you meet the following requirements, you should be eligible for a Medicare Advantage plan:

    • You must already have Medicare coverage (Parts A or B).
    • You must live in the plan’s service area.

    Medicare Advantage enrollees can learn more about eligibility requirements with each Advantage plan. Determining if you need to sign up for Medicare is one of the first steps in choosing the right plan for your needs.

    Types of Medicare Advantage Plans

    Each enrollee is different; thus, there are many different types of Medicare Advantage plans to choose from, with the following being the most common:

    Health Maintenance Organization (HMO) Plans

    An HMO plan is a type that requires you to receive medical services from providers who are in-network. However, you don’t typically have to go in-network if you need emergency care or out-of-area urgent care. HMO plans also cover prescription drugs, which can be beneficial in offsetting the cost of medications.

    Here are a few things to know about HMO plans:

    • Prescriptions included: Yes.
    • Primary care physician required: Yes.
    • Referral requirement: Yes, for specialists, but not routine medical care.
    • Out-of-network care: You may have to pay the full cost if you go out of network.

    In return, HMO plans often have lower premiums and out-of-pocket costs. While they may also have a smaller network of medical providers, this type of policy tends to be cheaper.

    Preferred Provider Organization (PPO) Plans

    A Preferred Provider Organization Plan (PPO plan) refers to a type of Medicare health plan that includes a network of healthcare providers. In this plan, you pay less if you use this network of providers. However, if you choose to receive services outside of the network, you may pay more. This gives you more flexibility to choose your medical providers, but knowing how much more they will charge is essential.

    Here are a few things to know about PPO plans:

    • Prescriptions included: Typically, yes.
    • Primary care physician requirement: No, you don’t need to choose a primary care doctor.
    • Referral requirement: No, as long as they are in-network.
    • Out-of-network care: May be available at a higher cost.

    A PPO includes a network of medical professionals that are cheaper to use. However, it also allows you to use certain medical providers that you want at a higher cost.

    Private Fee-for-Service (PFFS) Plans

    Private fee-for-service (PFFS) plans are a type of insurance coverage available through a private provider. Because it’s a private insurance provider, they decide how much you pay each year and how much the medical providers make within the program. This can affect which medical providers choose to work with the program.

    A PFFS works similar to a PPO in that you can typically visit any medical providers within the available network. However, while you may be allowed to choose medical providers out of network, it will cost more. You can also typically go to any Medicare-approved doctor or healthcare provider that agrees to treat you with your insurance in this program.

    Here are a few things to know about PFFS plans:

    • Prescriptions included: Sometimes.
    • Primary care physician requirement: No, you don’t need to choose a primary care doctor.
    • Referral requirement: No, as long as they are in the PFFS plan.
    • Out-of-network care: May be available at a higher cost.

    Always check with your medical provider before receiving medical care with a PFFS plan to cover it. Doctors out of network don’t have to provide you with medical care.

    Special Needs Plans (SNPs)

    Special Needs Plans (SNPs) are a type of Medicare Advantage plan that limits its membership to policyholders who have specific healthcare needs. This plan varies depending on your medical conditions and treatments and is usually customized to meet your needs.

    Under this plan, you must receive all medical care from approved healthcare providers unless you need urgent or emergency care. Additionally, if you have certain conditions, like end-stage renal disease (ESRD), you are exempt from receiving services in the SNP network.

    Here are a few things to know about SNPs:

    • Prescriptions included: Yes.
    • Primary care physician requirement: Yes.
    • Referral requirement: Yes, except for routine or emergency care.
    • Out-of-network care: May be available at a higher cost.

    This type of plan limits membership to certain groups with specific healthcare needs. This includes either:

    • People living in a nursing home or those who require in-home care
    • People who are eligible for both Medicare and Medicaid
    • People with specific healthcare conditions, including diabetes or ESRD
    • People with coordinated medical care

    This is not a complete list of available plans. There may be other ones available, depending on your healthcare needs. It’s always a good idea to shop around and find the best plan for you.

    Other, less common, plans may include:

    • An HMO Point of Service (HMO-POS) Plan
    • Medicare Medical Savings Account (MSA) Plan

    What is a Medicare Medical Savings Account Plan?

    A Medicare Medical Savings Account (MSA) Plan is a high-deductible Advantage plan with a bank account. In this plan, Medicare deposits money into your specified account. Policyholders can then use the deposited funds to pay for their healthcare needs.

    However, only certain expenses are eligible to count towards the deductible. The amount deposited into the account is usually less than this amount, meaning you will have to pay out-of-pocket before coverage begins. The program works by cooperating with private insurance companies. The companies offer care coverage for specific healthcare providers and needs.

    Most MSA Plans have two parts, including:

    • Part 1- High-deductible health plan: This plan requires that you meet a high deductible before receiving coverage. The specific amount varies between plans.
    • Part 2- This part offers a savings account in which the MSA plan, or private insurance company, deposits funds into the account for medical needs. You can use these funds to cover costs before meeting the deductible.

    MSA plans cover most medical services, including hospital, ongoing medical care, needs, and costs. Many MSA plans also cover other expenses, like dental, vision, hearing, and long-term care that are not traditionally covered by Medicare programs. It is important to note that most MSA plans do not cover prescription drug coverage, meaning you will usually need to enroll in part D.

    What is the Difference Between Medicare and Medicare Advantage?

    It can be helpful to consider the differences between Medicare and Medicare Advantage when deciding which one is right for you. Here are a few important distinctions:

    • What’s included: Original Medicare includes Part A (Hospital) and Part B (Medical) insurance, whereas Medicare Advantage is considered an all-in-one package, usually with Parts A and B, as well as Part D (Prescription).
    • Cost: The cost of both programs varies, depending on a few factors. Original Medicare costs may vary, depending on your income level and how much you have paid into the program. A Medicare Advantage plan cost varies, depending on the specific plan that you choose and what it includes.
    • Additional insurance: You may be able to buy supplemental insurance with Original Medicare, whereas with Medicare Advantage, you don’t need, and can’t buy Medigap.
    • Coverage and network needs: Original Medicare allows you to use any healthcare provider in the U.S., as long as they take Medicare. The Medicare Advantage program may require you to visit a medical provider in-network. Both cover most medical services that are necessary. For Original Medicare, the program will usually cover 20 percent of the approved-upon amount. Premiums on medical services are standard with both types. Original Medicare doesn’t have an annual limit on the amount spent, whereas Medicare Advantage plans may.
    • Approval: You don’t typically need approval for a medical service to use Original Medicare benefits. However, with Medicare Advantage, you may need approval ahead of time.

    Both plans don’t typically offer coverage outside the U.S. Evaluate the pros and cons when deciding which plan is right for you.

    What Does a Medicare Advantage Plan Cover?

    A Medicare Advantage plan covers the same services as Original Medicare. However, it doesn’t cover any services that aren’t considered necessary under Medicare.

    Medicare Advantage plans typically cover services like:

    • Hospitalization
    • Minimal home healthcare services
    • Hospice care
    • Prescription drug coverage
    • Preventative care

    Some may also cover things like dental, vision, hearing, and in some cases, access to the SilverSneakers program. SilverSneakers is a fitness membership that provides seniors with a network of fitness classes.

    What are the Advantages of a Medicare Advantage Plan?

    There are many reasons to consider a Medicare Advantage Plan. Here are a few of the top benefits:

    • Most plans include Part D: Most Medicare Advantage plans include Part D, which is prescription coverage.
    • There is a limit on your out-of-pocket costs: One of the most significant benefits of a Medicare Advantage Plan is that there are often limits on how much you will have to pay out-of-pocket. This can help to prevent unexpected medical bills.
    • Convenient coverage: When you enroll in Original Medicare, you will usually receive Parts A and B, but if you want additional courage, you’ll have to add it to your policy. With a Medicare Advantage plan, you can get all your coverage needs with one medical plan.
    • Out-of-network plans may be available: Some Medicare Advantage plans also have optional out-of-network plans available. These plans often come at a higher price but can make you eligible to choose your own medical providers.
    • The ability to create a plan based on your needs: With numerous Medicare Advantage plans available, you can choose one that meets your specific medical needs.
    • Often includes other benefits: Many Medicare Advantage plans provide additional coverage that may not be available with Original Medicare. This might include vision, hearing, or dental care, all services that may be necessary to manage your medical needs.
    • You still get access to Medicare Parts A and B: Even if you opt into a Medicare Advantage plan, you still get access to the Original Medicare Parts A and B. The only addition is that you may also get access to other healthcare coverages that Original Medicare doesn’t always cover.
    • Cost-effective: Medicare Advantage programs are often a cost-efficient way to get the medical coverage you need. They usually come at an affordable monthly price.
    • Coordinated care: Many Medicare Advantage plans also offer coordinated medical care, which means that your providers work together. This is important when it comes to managing multiple medical conditions, which many seniors may deal with into their retirement years.

    Perhaps one of the best parts of a Medicare Advantage plan is that you may have more control over what’s included or not with so many options available. For example, if you have a medical provider that you prefer to stay with, you may be able to find an affordable plan that allows you to continue visiting them.

    Your out-of-pocket costs are also limited with a Medicare Advantage plan. Once you reach the plan’s limit, you will no longer be charged for medical services.

    What are the Disadvantages of a Medicare Advantage Plan?

    Of course, it’s important to be aware of the considerations of a Medicare Advantage Plan before choosing it as your healthcare coverage.

    In-Network Requirement

    One important consideration is that with a Medicare Advantage Plan, you may be required to choose medical providers within a network. Additionally, most plans require that you use your Medicare Advantage plan when receiving medical services to be eligible. Once you enroll in a Medicare Advantage plan, they will provide you with an approved card. The red, white, and blue card is small enough to fit in your wallet and should be carried around with you at all times.

    Referral Requirement

    Most Medicare Advantage plans require a referral. You may also have to choose a primary provider. If you have a medical professional who leaves the program, you’ll need to select a new medical provider. However, the good thing is that you can usually find out what providers and services are covered with a policy before choosing that policy. Fortunately, most preventative services don’t require a referral.

    Provider Can Leave the Plan

    It’s also important to note that medical providers can enter and exit different Medicare Advantage programs at any time. Even after they have left the program, continuing to work with your healthcare provider can lead to more out-of-pocket costs for you. If your current provider chooses to leave the program and stay with the same Medicare Advantage program, you will usually have to choose a new provider.

    Additionally, just as medical providers can come and go, so can specific Medicare Advantage plans. Because private insurance companies offer Medicare Advantage plans, they can choose not to participate in the program at any time. If this occurs, you’ll also need to select a new plan.

    Limited Coverage Between States

    Medicare Advantage plans may be limited to your state. The specific coverage that you receive may vary from state to state. This is unlike the Original Medicare program, which is offered the same across the country. If you move to a new state or area, you may have to change your plan.

    Other potential considerations include limited-service providers or plans that can be confusing to figure out. Fortunately, there are many tools available online that can help you choose the right plan for you.

    How Much Do Medicare Advantage Plans Cost?

    When you choose to join a Medicare Advantage plan, the Original Medicare program will pay a fixed monthly fee on your behalf. However, depending on the plan and the provider you choose, you may still be subject to other out-of-pocket costs or rules. These rules may change from year to year.

    The specific cost of your Medicare Advantage plan may also change from year to year. For example, you are required to pay a Part B premium. In 2020, this amount was $144.60. However, this amount may be different based on your income level, as some may pay lower or higher. You may also be subject to other costs, including:

    • Deductibles: This is the amount that you’ll have to pay for your medical services before the program covers any costs.
    • Copayments: A copayment is typically a flat rate that you must pay when receiving medical services.
    • Coinsurance: This covers your share of any medical services. This amount may vary but is typically somewhere around 20 percent, meaning your plan will cover 80 percent.

    When choosing a Medicare Advantage plan, ensure that you find out all costs involved with the plan. Otherwise, you could be subject to unexpected bills.

    How to Enroll in Medicare Advantage

    If you’re interested in enrolling in a Medicare Advantage plan, you can do so with the following steps:

    1. Choose a Medicare plan: It’s important first to choose a plan that meets your healthcare needs. has a helpful tool that can help you compare plans.

    2. Check your plan eligibility: Once you have chosen a healthcare plan that meets your needs, you want to check your eligibility. Different plans have different requirements, so it’s important to know the specific regulations for the one you want to enroll in. In addition, you will need your personal information, as well as information about your Original Medicare plan.

    3. Fill out your application: Next, you will fill out your enrollment application within the application timeline. You’ll have to include your personal information.

    4. Collect your paperwork: If approved, you’ll receive a Medicare card, number, and information about the program.


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    Frequently Asked Questions About Medicare Advantage

    If you have a lot of questions regarding Medicare Advantage plans, you’re not alone. Here are some of the most frequently asked questions we get:

    What if I Have a Pre-Existing Condition?

    Even if you have a pre-existing condition, you can join a Medicare Advantage plan. Some Medicare Advantage plans, including special needs plans, are specifically designed for those with chronic medical conditions. A pre-existing condition does not make you ineligible for a Medicare Advantage plan.

    What if I Have End-Stage Renal Disease (ESRD)?

    Even certain medical conditions, like ESRD, allow you to receive coverage with a Medicare Advantage plan. As of Jan. 2021, people with ESRD can choose between Original Medicare or a Medicare Advantage Plan to meet their healthcare needs.

    What Other Types of Medicare Advantage Plans are Available?

    There are many Medicare Advantage Plans available. The most common are HMO, PPO, PFFS, and SNPs. Another available type, although less common, is MSAs.

    How Do I Join or Switch a Medicare Advantage Plan?

    You can usually make changes to your existing Medicare Advantage Plan, as long as you do so during the enrollment period. If you want to switch plans, join the new plan during the open enrollment period. This will automatically un-enroll you in the plan that you’re currently enrolled in.

    If you want to switch to Original Medicare, you will need to call the Medicare program instead.

    What Happens if My Provider Opts Out of the Program?

    If you’re currently enrolled in a Medicare Advantage plan and stop participating in the Medicare program, you will need to reconsider your healthcare needs. If they opt-out of the Medicare program, your coverage will end on December 31 of that year. If this happens, you have a few

    options available:

    • Choose another plan during the open enrollment period, which is from October 15th—December 7th. Your new coverage will begin in the new year.
    • Choose another Medicare plan under the special right period until February 28 of each year.
    • Opt-in for the right to buy a Medigap policy up to 63 days after your previous coverage ends. (This is only available to some policyholders).

    What If I Already Have Insurance?

    If you already have insurance, like through an employer, it’s important to consider how joining a Medicare Advantage plan may affect this. Always talk to your employer or human resource department before making changes. You may lose your work-sponsored healthcare coverage by joining a Medicare Advantage plan.

    I Lost My Medicare Advantage Card. Do I Need It?

    It’s important that you keep your Medicare Advantage card in a safe location, as you will frequently need it to access medical services. In addition to needing the card for medical services, you’ll also need the information on it if you want to switch back to the Original Medicare program.

    Fast Facts to Know About the Medicare Advantage Program

    Here are a few fast facts to know about the Medicare Advantage Program:

    • When you enroll in a Medicare Advantage Program, you’re still a part of the Medicare program. Medicare regulates all Advantage Programs. This means you still receive the same government protections and rights, even if you opt-in to a Medicare Advantage program instead of the Original Medicare.
    • A Medicare Advantage program still gives you access to Medicare Parts A and B. The program, however, may also offer you additional benefits, like dental or chiropractic care.
    • A Medicare Advantage plan can be a more cost-efficient choice, especially if you have ongoing medical care needs.
    • You can always make changes during the open enrollment periods if you find that a Medicare Advantage plan is not right for you.
    • You don’t need Medigap coverage with a Medicare Advantage plan. In fact, you cannot enroll in both plans.
    • A pre-existing condition does not make you ineligible for enrolling in a Medicare Advantage plan.
    • Most Medicare Advantage plans require that you choose a provider in-network, but you can usually determine if your preferred providers are in-network before choosing a plan.
    • Medical professionals can join, or leave, a Medicare Advantage plan at any time, making it important to follow these changes.
    • Specific Medicare Advantage Plans can also choose to leave the Medicare program at any time, in which you’ll have to choose another.
    • Most Medicare Advantage plans have a limit. Once you reach this limit, you won’t have to pay anything for your medical services.

    One plan isn’t better for all seniors. Instead, it’s important to compare the advantages and disadvantages of each one based on your healthcare needs.

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