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About Medicare Advantage (Part C) Plans
What is a Medicare Advantage plan?
If you are currently enrolled in Original Medicare, Part A and Part B, you can choose to enroll in Medicare Part C, better known as Medicare Advantage. Medicare Advantage plans are offered by private health insurance companies to provide and coordinate Medicare Part A and Part B benefits (hospital and medical) for beneficiaries.
Wondering why a Medicare beneficiary would choose to enroll in a Medicare Advantage plan? A Medicare Advantage plan is required to cover everything that Original Medicare covers (except for hospice care), including emergency and urgent care. Hospice care is covered by Original Medicare. Hospice benefits will continue to be covered by Original Medicare even if you have a Medicare Advantage plan. But, there are differences between Original Medicare and a Medicare Advantage plan. Those differences can be in how much you pay out of your own pocket when you receive health care. For example, a Medicare Advantage may provide you with lower copayments and coinsurance or a smaller deductible than Original Medicare.
Medicare Advantage offers at least the same coverage as Original Medicare, and may offer additional benefits. It may be one way of adding coverage for routine vision, or dental services, dentures, fitness programs, and more. Some Medicare Advantage plans have a $0 premium. However, regardless of how much you pay for a Medicare Advantage plan, you must continue pay your Medicare Part B premium.
Many Medicare Advantage plans also include prescription drug coverage; those plans are called Medicare Advantage Prescription Drug plans (MAPD).
Remember, when you enroll in a Medicare Advantage plan, you remain enrolled in Original Medicare, and you must continue paying your Medicare Part B premium. However, if you enroll into a Medicare Advantage plan, you will not be allowed to enroll in a Medicare Supplement insurance plan (Medigap).
Types of Medicare Advantage (Part C) plans
It’s important to understand the differences between the types of Medicare Advantage plans and find the type that works best for you. There are several different types of Medicare Advantage plans:
- HMO (Health Maintenance Organization): An HMO lets you see doctors and other health professionals who participate in its provider network. If your doctor is already in network, it could be a good option because you tend to pay less out-of-pocket with in-network doctors.
- PPO (Preferred Provider Organization): A PPO covers both in-netwrok and out-of-network providers, giving you the freedom to choose any doctor that accepts Medicare assignment, which may be better for you if you prefer more flexibility in your plan.
- PFFS (Private Fee-for-Service plan): A PFFS plan determines how much it will pay providers and how much you must pay when you get care. The treating doctor has to accept the plan’s payment terms and agree to treat you. If the doctor doesn’t agree to those terms, then the PFFS plan will not cover services through that doctor.
- SNP (Special Needs Plans): SNPs are designed specifically for people who have certain special needs. The three different SNP plans cover Medicare beneficiaries living in institutions, those who are dual-eligible for Medicaid and Medicare, and those with chronic conditions such as diabetes, End Stage Renal Disease (ESRD), or HIV/AIDS. This type of plan always includes prescription drug coverage.
- HMO-POS (Health Maintenance Organization – Point of Service plan): Covers both in- and out-of-network health services, but at different rates. You pay less out-of-pocket when you go to in-network doctors, labs, hospitals, and other health care providers.
- MSA (Medical Savings Account plan): Includes both a high deductible and a bank account to help you pay that deductible. The amount deposited into the account varies from plan to plan. The money is tax-free as long as you use it on IRS-qualified medical expenses, which include the health plan’s deductible.
Eligibility for Medicare Advantage plans
Eligibility for a Medicare Advantage plan is based on your eligibility for Original Medicare, Part A and Part B (except if you have ESRD). Generally, if you have Medicare Part A and Part B, you are eligible for Medicare Part C. However, you must live in the service area for the Medicare Advantage plan and have an eligible election period.
If you have other health insurance coverage, for example through an employer or union, ask your plan administrator about that plan’s rules before you enroll in a Medicare Advantage plan. In some cases, you may lose your other coverage if you enroll in the Medicare Advantage plan and you may be unable to get it back if you change your mind later.
Enrollment in Medicare Advantage plans
You may only enroll in a Medicare Advantage plan during specified election periods:
Initial Coverage Election Period: You can enroll into a Medicare Advantage plan or Medicare Advantage Prescription Drug plan when you first become eligible for Medicare. Your Initial Coverage Election Period (ICEP), is a seven-month period that starts 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65. If you are under age 65 and you receive Social Security disability, you qualify for Medicare in the 25th month after you begin receiving your Social Security benefits. If you fall into this category, you may enroll into a Medicare Advantage plan 3 months before your month of eligibility, during the month of eligibility, and 3 months after the month of eligibility. For example, if your Medicare Part A and Part B coverage begins in May, your Medicare Advantage plan ICEP is February through August.
Annual Election Period: The Annual Election Period (AEP) is October 15 through December 7 every year. The plan you choose during AEP begins on January 1 of the next year. It allows Medicare beneficiaries to add, change, or drop their current coverage. You can use this period to enroll into a Medicare Advantage or Medicare Prescription Drug Plan or switch plans. If you’re already enrolled into a Medicare plan, you can use this period to disenroll from your plan.
Medicare Advantage Disenrollment Period: If, after enrolling in a Medicare Advantage plan, you change your mind, you can switch back to Original Medicare from January 1 through February 14 each year. If you would be losing prescription coverage as a result of the switch, you can also enroll into a stand-alone Medicare Part D Prescription Drug Plan during this time.
Special Election Period: Generally, once you enroll into a Medicare Advantage plan, you stay enrolled in the plan until the next Annual Election Period (AEP) opens. However, there are some life events that might qualify you for a Special Election Period (SEP) during other times of the year. Some examples of these life events include (but aren’t limited to):
- Moving outside your Medicare Advantage plan’s service area
- Qualifying for Extra Help (a program to help you pay for prescription drugs)
- Moving into an institution (such as a nursing home)
Many Medicare beneficiaries opt for a Medicare Advantage plan. To see if this route may be a good for you, contact a licensed Health Enroller insurance agent. We have the knowledge to answer your Medicare Advantage questions.
What Is Medicare Part D?
Medicare Part D prescription drug coverage, often referred to as Part D, is provided by Medicare-approved private insurance companies. Any beneficiary who is eligible for Original Medicare, Part A and/or Part B, and permanently resides in the service area of a Medicare Prescription Drug Plan, can sign-up for Medicare Part D. Medicare Part D coverage is optional, but if you don’t enroll in Part D as soon as you’re eligible, you might pay a late-enrollment penalty if you enroll later.
You can get Medicare Part D coverage through a stand-alone Medicare Prescription Drug Plan if you’re enrolled in Original Medicare. If you’re enrolled in a Medicare Advantage plan, you can get this coverage through a plan that includes drug benefits, also known as a Medicare Advantage Prescription Drug Plan. Different insurers offer different types of plans, so your monthly plan premium and out-of-pocket expenses for prescription drugs will vary from plan to plan.
Every Medicare Prescription Drug Plan has a formulary — that is, a list of covered drugs. The formularies vary among plans. The formulary may change at any time. You will receive notice from your plan when necessary.
It is a good idea to review your Medicare Prescription Drug Plan coverage every year, to see if your plan covers the medications you need now and may need in the upcoming year.
Finally, be aware that your plan may change its formulary. You may want to review the Annual Notice of Change that the plan sends you every fall to make sure it will still cover your prescription medications in the coming year. Coverage generally follows this pattern:
- If the Prescription Drug Plan has an annual deductible, you pay the full amount of your prescription drug purchases until the deductible is met.
- After you satisfy the annual deductible, you will pay a share of the costs according to the terms and structure of your plan. Your share, which you typically pay to the pharmacy at the time of pickup, could be a flat amount (copayment) or a percentage of the total amount (coinsurance).
- Once you have paid a certain annual maximum amount out of your own pocket for prescription drugs, you automatically get “catastrophic coverage.” This means for the rest of that particular year, you would only pay a small copayment or coinsurance amount for prescription drugs.
Be sure to talk to your doctor to see if you are taking the lowest cost medications available to you. Specific coverage may vary from plan to plan, so read your documentation carefully.
Filling the coverage gap
You may have heard of the Medicare coverage gap (also called the “donut hole”) but aren’t clear on how it works. After your Medicare Part D coverage has paid a certain amount for prescription drugs, you may have to pay all costs yourself, up to a yearly limit. This temporary limit on what your Medicare Prescription Drug Plan will pay for covered drugs is the coverage gap. The coverage gap applies to both stand-alone Medicare Prescription Drug Plans and Medicare Advantage Prescription Drug Plans.
The recent federal health-care reform legislation will reduce the coverage gap over several years to make prescription drugs more affordable. There will be additional savings in the coverage gap each year through 2020, when the coverage gap is closed completely.