Medicare insurance contains certain "gaps" that can lead to significant out-of-pocket costs for certain medical occurrences. Initially, consumers who wanted to strengthen their
Medicare coverage only had one choice: A Medicare supplement plan
There are a variety of supplement plan options that provide different levels of supplement protection.
The various plan types are designated by letters of the alphabet (A-N). Generally, the more comprehensive the coverage, the higher the cost of the supplement plan.
President Bill Clinton signed Medicare+Choice into law in 1997. The name changed to Medicare Advantage in 2003. Medicare Advantage Plans are an "all in one" alternative to the Original Medicare / Supplement plan arrangement.
These plans are offered by private companies approved by Medicare. If you join a Medicare Advantage Plan, you still have Medicare. These "all in one" plans include Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance),
and usually Medicare prescription drug (Part D).
Advantage plans are required to offer at least the same level of coverage as the Original Medicare Part A and Part B coverage. Most Advantage plans also feature several attractive additional benefits that are not offered by original Medicare.
These benefits could include coverage for vision care, hearing aids, dental care, prescription drug coverage, transportation to and from medical facilities, and even fitness center membership. The result is usually a very comprehensive medical insurance plan.
If you enroll in a Medicare Advantage plan, you will continue to pay your Medicare Part B premium. The private insurer determines what the Medicare Advantage plan premium will be. This premium amount will vary from one plan style to another.
Good to know: Each insurance provider has a formulary or list of medicines covered by the plan. If a medicine is not on the formulary it may not be covered and you may have to endure a potential nightmare attempting to find an alternative medication. The list of covered medicines is also often divided into tiers, which determines how much of a copay or coinsurance you may have to pay. Make a list of your current medicines and compare it to the plan's formulary to make sure your medicines are covered and you understand the out-of-pocket costs that may be associated with them.
Medicare Advantage plan monthly premiums tend to be somewhat less expensive than Medicare Supplement plan monthly premiums. Some Medicare Advantage plan premiums may be as low as $0 per month.
Copay costs may also be less with a Medicare Advantage plan. For, example, if you visit a primary care physician under a Medicare Advantage plan, you may pay a copayment of $10. However, if you visit a primary care physician under Original Medicare,
you may have a coinsurance of 20%, which could be significantly more than $10.
A Medicare Advantage plan will limit your maximum out-of-pocket expense. Once you have spent that maximum, you pay nothing for covered medical services for the remainder of the year.
Medicare Advantage Rules and Guidelines
Medicare pays a fixed amount for your care each month to the companies offering Medicare Advantage Plans. In turn, these companies must follow rules set by Medicare.
Each Medicare Advantage Plan can charge different Out-of-pocket costs. They can also have different rules for how you get services – for example:
Whether you need a referral to see a specialist.
What shared medical costs you are responsible for.
Good to know: Ask for a discount. You can potentially reduce the cost of your medical bills by asking for a discount upfront. It may seem unconventional, but many hospitals and practitioners offer certain discounts for which you may be eligible. For example, some hospitals are part of networks that will reduce your medical bills by a certain percentage if you pay over the phone. More often than not, these discounts are only available to consumers who ask for them. Depending on your economic status or the price of your procedure, some medical facilities offer additional discounts that can be paired with your medical insurance to substantially reduce the cost of your procedure. For example, it's not uncommon for hospitals to offer discounts of up to thirty percent for qualifying customers.
Even if you don't find a discount related to your particular situation, your doctor or hospital may provide you with valuable information about discounts you can use in the future.
Many Medicare Advantage plans have smaller doctor and hospital networks than do Medicare Supplement plans. Also, many Advantage plans work within an HMO style,
managed care administration structure. In such a structure, a primary care physician manages your care and is responsible for referring you to a specialist if necessary.
For more information concerning Medicare Advantage, Medicare Supplement or Medicare Prescription Drug Plans, please give us a call.
How To Switch From A Medicare Advantage Plan To A Medicare Supplement Plan.