Medicare Advantage Basics

What is Medicare Advantage?

You can either get your Medicare benefits through Original Medicare + a Medicare Supplement plan, or a Medicare Advantage Plan. With Original Medicare, the government pays for your benefits. With a Medicare Advantage, Medicare pays the private insurance company to cover your benefits.

To understand which insurance plan you have, first consult your plan card(s) and paperwork

These should have been sent to you soon after you enrolled in your Medicare Advantage plan. With Medicare Advantage, you will not need to provide an Original Medicare card to your doctor or hospital since your Advantage plan covers your Part A and Part B benefits.

Medicare Advantage plan cards, will have one of the following terms on them: HMO, PPO, PFFS, SNPs, or HMOPOS. If your card has one of those terms, you have a Medicare Advantage plan. These letters may seem confusing but simply indicate which type of network your plan uses.

NOTE: If you have a Medicare Supplement plan, your card will list a plan letter. This could be anything from Plan A through Plan N.

Types of Medicare Advantage plans

Coverage levels vary amongst Medicare Advantage programs, with some offering exactly the same level as Medicare Part A + Part B and others offering higher or lower benefit options. Once major factor in determining the strength of an advantage plan is what type of network it uses. As mentioned above, there are five different network setups.

The most important thing to know is that networks are determined by the insurance company and can change each year. This means each year you’ll want to ensure your doctor still accepts your plan. It also means, depending upon network type, you may have a lesser coverage level if you travel out-of-network.

Most plans in most areas this year are HMO or PPO plans. With an HMO, you can only go to providers in your network except for urgent or emergency situations. With a PPO, you’ll generally pay more if you use a provider outside of your network, but will still have some coverage.

Other coverage options

Medicare Advantage plans are a great option for some Medicare beneficiaries. But, what if you want less potential out-of-pocket costs, are unhappy with your coverage, or just wonder what else is out there?

You have two other options beyond a Medicare Advantage plan. The first (which we do not recommend) is simply using Original Medicare by itself. This option opens you up to thousands of dollars of potential out-of-pocket costs. After paying for Part A and Part B deductibles, you’d be responsible for 20% of all charges at the doctor and hospital within plan limits.

The second alternative to Medicare Advantage plans are called Medicare Supplement plans. These plans, also called Medigap, come in to help pay that remaining 20% not covered by Original Medicare. Medicare Supplement plans are standardized by the Federal Government, which makes them easy to shop. Additionally, these plans do not have networks so you can use any provider anywhere in the country that accepts Medicare.

Medicare Enrollment Periods

In the months leading up to joining Medicare at age 65, you have a one-time enrollment period known as the initial enrollment period. During this time, you can enroll in any plan of your choice without any health underwriting or delay. This period begins three months before your 65th birthday and ends three months after. In your initial enrollment period you can choose a Medicare Advantage plan or Medicare Supplement plan.

If you have a Medicare Advantage plan and want to shop around to see what’s out there, this must happen during the Medicare Annual Enrollment Period (AEP). This period that runs from October 15th – December 7th each year allows Medicare Advantage plan enrollees to shop around for another Advantage plan, to join a Medicare Supplement plan, or to go back to Original Medicare. Any changes made during AEP take hold on January 1st of the following year. If you choose to go from an Advantage plan to another Advantage plan, you will not be required to answer health questions to qualify for coverage. If you go from an Advantage plan to a Medicare Supplement plan, you will be required to go through underwriting.