When you’re only enrolled in Medicare Part A and Part B, you get your health benefits through Original Medicare. If you enroll in a Medicare Advantage plan, you’re still enrolled in Original Medicare; however, a private insurance company will deliver your benefits with a Medicare Part C plan. In contrast to Medicare Part A and Part B, the best Medicare Advantage plans are usually HMOs or PPOs and look more like the kind of insurance you may be used to from work or individual health insurance.
Understanding Medicare Advantage Plan Enrollment Periods
To qualify for Medicare Part C:
- You must be enrolled in Medicare Part A and Part B.
- You cannot suffer from End Stage Renal Disease ESRD, but there are special plans for people who suffer from ESRD.
Otherwise, the government allows people to join a Medicare Advantage plan at these times:
- Initial Coverage Election Period: When you are about to turn 65, you get a seven-month period to enroll in a Medicare Advantage plan. This includes the three months before, the month of, and three months after you are turning 65. People who are disabled and qualify for Medicare Part A and Part B when they are younger than 65, get a somewhat different Initial Coverage Election Period.
- Annual Election Period: This is usually called Open Enrollment, and it occurs for a few months every fall. During this time, you can switch Medicare Advantage plans for coverage that will begin on January 1 of the next year.
- Special Election Period: Several circumstances can trigger a Special Election Period or SEP. These may include moving, losing prior coverage, and other circumstances.
A Medicare beneficiary also has a Medicare Advantage Disenrollment Period every year that begins on January 1 and lasts for a few weeks. During this time, you can choose to drop Medicare Part C, go back to Medicare Part A and Part B, and then join a stand-alone Part D plan if you require drug coverage.
Also, you will use your new Medicare Advantage plan ID card most of the time once your new benefits start. Keep your Original Medicare card in a safe place, but use the new card for services at a doctor, hospital, or another provider.
Comparing Medicare Advantage Plans
This brief list highlights important factors to compare for a Medicare Advantage plan:
- Coinsurance, copayments, and deductibles
- A network of providers and network rules
- Premiums, benefits, and out-of-pocket costs
- Prescription benefits
Also, Medicare has a system with a star rating for each plan. The star rating gives people a simple way to see how the plan has performed in the past and might perform in the future. A five-star plan is the best, but this is actually fairly rare. If it’s not possible to find a five-star plan, it’s a good idea to do more research into the things other members liked or disliked.
Popular Kinds of Medicare Advantage Plans
Medicare Part A and Part B work the same way everywhere in the country. A Medicare beneficiary should not assume that each Medicare Advantage plan will work the same way as another one. It’s important to compare different kinds of plans and of course, plans from different insurance companies. The premiums, coinsurance, network, deductibles, copayments, and even the preferences of the beneficiary may impact the best choice for any individual.
It’s helpful to compare the best kinds of MA plans:
- Health Maintenance Organization HMO plans: These are most likely to offer modest or even $0 premium rates and affordable out-of-pocket costs. In turn, an HMO will have the most restrictive network rules. In the US, HMOs have about 63% of the total market.
- Preferred Provider Organization PPO plans: Typically, a PPO may have somewhat higher premiums and out-of-pocket costs. However, they remain popular because they offer the choice to have out-of-network healthcare costs covered. PPOs have about 33% of the market.
- Private Fee for Service: PFFS plans are not as popular as network MA plans. They have about one percent of the market. They don’t use networks, but the doctor, hospital, or other medical providers still have to accept them.
- Cost: A cost Medicare Advantage plan will work like an HMO with in-network providers, but it will revert to working like Original Medicare outside of the network. They tend to be more popular in rural areas and have about three percent of the market.
In addition, some Medicare beneficiaries may find that they will benefit from these kinds of Medicare Advantage options:
- Special Needs Plans SNPs: Special Needs Plans address the unique needs of people who may have to manage chronic health conditions or institutional conditions.
- Dual-Eligible: Medicare beneficiaries may qualify for both Medicaid and Medicare Part A and Part B, and they can enroll in a Dual-Eligible Medicare Advantage plan with a $0 premium and no out-of-pocket costs for covered services.
National Enrollment Statistics for Medicare Advantage Plans
These are some national enrollment statistics for Medicare Part C:
- Percent of the U.S. market for Medicare insurance: 3%
- Total Number of U.S. Medicare Advantage plan enrollment: 18,973,154
- Most common kind of U.S. Medicare Advantage plan: HMO
How The Best Medicare Advantage Plan Covers Prescription Medicine
Original Medicare only covers prescriptions in limited circumstances, such as inside of hospitals and certain clinics. Medicare Advantage Prescription Drug plans, often called MAPD, do cover prescriptions.
To find the best MAPD, these are some important factors to compare:
- Prescription formulary: This is simply the list of all of the medications covered. Some insurers may make exceptions for unusual circumstances, but these need to be approved in advance.
- Prescription Drug tiers: The insurance company will also classify different prescriptions for different benefit levels, such as for generics, brand names, and specialty medication.
Anybody who relies upon prescription medication should carefully check the formulary and Prescription Drug tiers to find a solution that will pay the highest rates for their own medicine. If prescription needs change, it’s also possible to switch to another Medicare Advantage plan during the Annual Election Period.
Network Restrictions for a Medicare Advantage Plan
In the United States, network plans take 96% of all of the enrollment in a Medicare Advantage plan. An HMO will only cover in-network healthcare unless it is an emergency or under other unusual, pre-approved circumstances. A PPO will cover out-of-network providers, but they may charge higher copayments or deductibles to do so.
In addition, an HMO will require each member to have a primary care doctor. This doctor has to give referrals for visits to specialists and some other medical services. A PPO doesn’t require a PCP or primary care physician. Members of a Medicare Advantage plan are likely to feel satisfied with their coverage if they have a convenient doctor, hospital and other medical services, so it’s important to check the network and to understand it might change each year.
People who move away from their network may get a Special Election Period to switch plans. A few PPOs have national or statewide networks, and these might be convenient choices for people who plan to travel.
Comparing Other Medicare Advantage Plan Benefits
Besides covering prescriptions, a Medicare Advantage plan may offer additional benefits that can’t be found in Original Medicare. For instance, they often help with routine vision and dental and hearing. They may also have wellness programs that include fitness programs like Silver Sneakers or discounts on vitamins and other non-prescription medicine.
Authority Medicare Resources
For some additional help, consider these Medicare resources: