Medicare Advantage Plans

What Medicare Advantage Is

Medicare Advantage Plans (Part C) are a kind of all-in-one alternative to the combination of Original Medicare and a Medicare Supplement policy. Often, they also include prescription drug (Part D) coverage. Medicare Advantage is offered by private insurance companies and is regulated by CMS. The idea is to reduce costs, improve coverage, and achieve better health outcomes, without losing the rights and protections of Original Medicare. The plans not only include hospital and medical coverage, but may also offer additional benefits not found in Original Medicare, such as vision and dental care, hearing services, and fitness programs. Some plans offer such benefits as an allowance for over-the-counter (OTC) items, and health management programs.

There are several Medicare Advantage plans, and each has its own structure for benefits, as well as costs. It is strongly recommended that you do thorough comparison shopping, as you would for any health coverage. We are happy to help.

How Medicare Advantage Works

Medicare Advantage plans receive a fixed monthly amount from CMS for each enrolled member. This is one of the ways that MA plans can offer so much coverage at an affordable price. If the payment covers the plan’s total expenses, there may be a zero premium for the member; if not, the difference is a premium to be paid by the member. The amount of your premium varies, based on the insurance company, as well as your location and the plan you select.

 How Medicare Advantage Is Regulated

Each company that offers Medicare Advantage plans must submit a bid for proposed coverage and premium amounts annually to CMS, which reviews the details to ensure that federal guidelines are met. If the bid is approved, each insurer may set their own costs and establish individual Medicare Advantage plans’ requirements, which may include requiring that care is provided only by in-network providers and requiring a referral from your primary care provider in order to see a specialist. That is different from Original Medicare, which generally does not require referrals, and allows you to see any provider who accepts Medicare payment.

Changes In Coverage and Cost

Insurers contract with CMS for a one-year period, so they may change their coverage and/or premiums annually. Your plan will send an Annual Notice of Change, to notify you of any changes before the next coverage year begins, so you have the chance to change your coverage if necessary.

It’s important to review these notifications to make sure your coverage continues to meet your needs. If not, you may select a new plan during open enrollment.

What Medicare Advantage Covers

Medicare Advantage is designed to cover everything that Original Medicare does, and sometimes more.

Hospital Costs

Medicare Advantage offers all of the hospital care benefits included in Medicare Part A, including inpatient and eligible nursing home care. All plans offer 90 days of inpatient care.

Medical Costs

Medicare Advantage plans, like Medicare Part B, cover two types of services:

  1. Medically necessary services: Care and/or supplies needed to diagnose or treat a medical condition.
  2. Preventive services: Care needed to prevent illness or detect it early so treatment will be more effective

Covered services include:

  • ‌Doctor’s visits
  • Ambulance services
  • Mental health care
  • Durable medical equipment (wheelchairs, walkers, etc.)

‌Depending on your plan, services in this category may require a copayment.

Prescription Medications

Most Medicare Advantage plans include prescription drug coverage, and are called MAPD plans. If your Medicare Advantage plan doesn’t cover prescriptions, you may be able to pay separately for a Part D plan, depending on what type of Advantage plan you have:

  • If you have a Private Fee-for-Service plan or medical savings account, you can join a Part D plan.
  • If you have a health maintenance organization (HMO) or preferred provider organization (PPO) plan, you cannot join a Part D plan.‌

Almost all Medicare Advantage plans charge a copayment for prescription medication; the amount charged depends on the plan and the type of drug. There may also be a prescription drug deductible. One exception is Special Need Plans.

Additional Benefits

Medicare Advantage plans may also offer benefits that you wouldn’t be able to get under Original Medicare or Part D.  Examples are:‌

  • Routine dental care, vision services (including eyeglasses and contact lenses), and routine hearing services, including hearing aids.
  • Fitness benefits
  • An over-the-counter allowance for medical-related items like band-aids and vitamins
  • According to the Kaiser Family Foundation, 46% of Medicare Advantage plans offer meal benefits. These may include nutrition education, cooking classes, or meal delivery.

What Medicare Advantage Does Not Cover

Like Original Medicare, Medicare Advantage does not cover:

  • Medically unnecessary services (which includes most cosmetic surgery)
  • Most long-term care placements

Long term care is covered by Medicare Advantage only if you need skilled nursing services for a qualifying medical condition. Generally, that means you are coming out of a covered hospital stay and have remaining inpatient benefit days. If your caregiver does not need specialized medical training to care for you, it is considered “custodial care,” and is not covered by Medicare Advantage. That includes help with activities of daily living (ADLs).

Types of Medicare Advantage Plans

There are several types of plans, including:

  • MA PD Plans
  • MA Only Plans
  • Medicare Medical Savings Account (MSA) Plans
  • Special Needs Plans

Medicare Advantage Prescription Drug Plans (MAPD)
These plans include coverage for prescription drugs so that a separate pan is not needed.

Medicare Advantage Only Plans (MA)
These plans do not include prescription drug coverage, so that members still need creditable coverage, such as purchasing a Part D plan (PDP).

Medicare Medical Savings Account (MSA) Plans
With these plans, a lump sum is deposited annually into a savings account by the plan via Medicare. The unused balance of the annual deposit will roll over each year. Members have the flexibility to spend their balance on qualified health expenses (e.g., hospital, medical, dental, vision, and long-term care costs) or save it for future costs. Since the Medicare MSA Plan is a high-deductible health plan, nothing is covered until the deductible is met. These plans do not include coverage for prescription drugs, so a PDP or other creditable coverage is necessary to avoid penalties for late enrollment.

Special Needs Plans (SNPs)
There are several types of SNPs, including Dual Eligible Special Needs Plans(D-SNPs) available to individuals eligible for both Medicare and Medicaid, Chronic Condition Special Needs Plans (C-SNPs) designed to provide coverage for people with certain chronic conditions. They include prescription drug coverage, as well as services to manage chronic conditions. More detailed information is available in a separate Guide.

The Benefits of Having a Medicare Advantage Plan

Medicare Advantage plans are growing in popularity. The Congressional Budget Office estimates that 41 percent of individuals eligible for Medicare will have a Medicare Advantage plan by 2026. Currently, about 34 percent of Medicare beneficiaries are enrolled in a Medicare Advantage plan. For many people over age 65, private health insurance, including Medicare Supplement plans, may be too expensive.  Medicare Advantage is generally more affordable, but you should be aware of the trade-offs.

Here are some of the good points:

  • Medicare Advantage plans are usually affordably priced, often with 0 dollar premiums. In a few select locations, where companies are working to increase their membership, the plan may even provide a payment for the member’s Part B premium.
  • Medicare Advantage plans may have hearing, vision, and dental benefits that Original Medicare doesn’t offer. Many include prescription drug coverage. Instead of having to buy multiple plans (e.g., DVH plans and Medicare Supplements (Medigap) and a prescription plan, Medicare Advantage is an all-in-one plan.
  • The additional coverage can give you more peace of mind because your expenses won’t unexpectedly increase during the year.
  • Medicare Advantage has out-of-pocket maximums, so you know your medical costs won’t spiral out of control in a “worst case scenario.”‌

And the drawbacks:

  • ‌You have to follow your Medicare Advantage plan’s rules for where and how to get services.
  • Not as many medical providers are available as with Original Medicare. Some plans operate within service areas as small as a zip code and have limited provider networks. While HMOs generally offer little to no coverage for out-of-network services, some do offer features allowing members to receive limited in-network coverage in a different state.
  • Costs are likely to be different than with Original Medicare. If you require more than a minimum of medical services, copayments and coinsurance may add up to become a financial challenge.
  • If you have Medicare Advantage, you can’t buy a Medicare Supplement plan to help you with out-of-pocket costs like copayments or deductibles.
  • Covered services and costs are subject to change annually.

Click here to download a PDF of this Guide.

I’m happy to offer a free consultation to answer your questions and help you get the coverage you need. Please call me at (434) 373-0051.