Comparing Medicare Advantage Plans

If you are considering enrolling in a Medicare Advantage plan (also called Medicare Part C), there are several different plan types you can learn more about. Not all types of Medicare Advantage plans are available in all locations, so it’s important to find out exactly what plans are offered where you live.

The information in this guide can help you learn more about the Medicare program and compare different types of Medicare Advantage plans. From there, you can make a more informed decision on which option fits your health and budgetary needs.

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What is a Medicare Advantage plan?

Before shopping for a Medicare Advantage plan, it can be helpful to learn more about how this type of plan works.  

A Medicare Advantage plan can offer a similar design to a traditional health insurance plan but with one important caveat: At the minimum, every Medicare Advantage plan must offer at least the same benefits as those that are offered by Medicare Part A and Part B (also commonly referred to as Original Medicare).

Beyond Medicare Part A and Part B benefits, some Medicare Advantage plans may cover some additional services, which may include dental, vision, hearing and prescription drug coverage.  

Medicare Advantage plans can come in a variety of forms such as HMO’s, PPO’s and more. The cost, coverage and availability of each type of plan can vary, so here is some information you can use to help you learn more about your options.

Medicare Advantage vs. Medicare

Medicare Advantage has seen a surge in popularity in recent years. From 2004 to 2019, the number of people enrolled in a Medicare Advantage plan more than tripled to reach 20 million in all. Today, over one-third of Medicare beneficiaries are enrolled in a Medicare Advantage plan.

The decision to choose a Medicare Advantage vs. Medicare Part A and Part B often comes down to one’s health care or spending needs. Some people might opt for a Medicare Advantage plan because of some of the following features offered by some plans.

Additional benefits

Because most prescription drugs and common dental, vision and hearing care are not covered by Original Medicare, a Medicare Advantage plan can be an option for many people who are looking to have some coverage for these needs.

An out-of-pocket spending cap

Medicare Part A and Part B do not include an out-of-pocket spending maximum. This means that patients will continue to pay a portion of the cost of Medicare-covered services, no matter how much health care they require.

By law, Medicare Advantage plans must include an annual out-of-pocket spending limit. Once the limit is reached, the plan pays for all services covered by the plan for the remainder of the year.

This can help protect the plan beneficiary from being billed for many thousands of dollars beyond their plan deductibles and copayments in the event of serious illnesses, accidents, surgeries or other expensive services.

Out-of-pocket limit amounts can vary for each plan. 

Spending flexibility

Medicare Part A and Part B have standard costs for premiums, deductibles and coinsurance that are determined each year by the Centers for Medicare and Medicaid Services (CMS). But Medicare Advantage plans can offer more choices for how beneficiaries spend their health care dollars. 

One person might prefer a Medicare Advantage plan with lower premiums and a higher deductible, while another person may opt for a plan with higher premiums but a lower deductible. Having flexibility and choice can be important for some people, and the variety of Medicare Advantage plan types can be one reason a beneficiary might consider Medicare Advantage vs. Medicare Part A and Part B.

Comparing Medicare Advantage Plans 

There are several steps you can take as you shop for Medicare Advantage plans and explore which plan might be the right fit for your needs.  

Decide which type of plan you prefer

There are several different types of Medicare Advantage plans, including:

Health Maintenance Organization (HMO)

This type of plan involves a network of health care providers which patients must visit to receive plan-covered care. Most HMO plans require enrollees to select a primary care doctor that must be visited in order to receive a referral for a specialist.

Preferred Provider Organization (PPO)

A PPO plan also includes a network of providers, but enrollees are generally allowed to visit providers outside of the network, though they typically must pay a higher cost for covered services. PPO plans do not require a referral to see a specialist.

Private Fee-For-Service (PFFS)

A PFFS plan determines how much it will pay health care providers and how much the beneficiary will pay upon receiving care that is covered by the plan. The “networks” for these plans include doctors and other health care providers who have agreed to the payment and terms established by the plan. In most cases, beneficiaries can visit any Medicare-approved doctor who also agrees to these terms.

Special Needs Plans (SNP)

These types of plans are intended for people with special needs such as severe or chronic conditions or who are in specific care situations such as living in a nursing home. Each plan is tailored to fit the specific benefits and coverage needed by the patient.

Medical Savings Account (MSA)

A Medical Savings Account combines a high-deductible health plan with a bank account. Medicare makes deposits into the account which the patient then uses to pay for health care expenses.

Deciding which type of plan might be right for you comes down to personal preference and plan availability where you live. Some may like the freedom that a PPO or PFFS plan can offer, while others may value having their care coordinated through a primary care doctor such as in an HMO. It’s up to you to decide which type of plan you feel most comfortable with.

Analyze your health care needs

Many Medicare Advantage plans offer additional benefits not found in Medicare Part A and Part B. Analyze your health care needs and try to anticipate what type of care you may be requiring in the upcoming year. (Remember, you can change plans every year.)

Contact an agent

There are two ways to gather information about Medicare Advantage plans available in your area. One way is to solicit each insurance company individually and compile costs and coverages one-by-one.

Another efficient way to compare plans is to contact a licensed insurance agent who can quickly pull information from certain plans offered in your area and comb over the details of those plans with you. A licensed insurance agent can answer your questions during the shopping experience and help guide you to the plan or plans that may be right for you. 

Compare ratings

Each year, the Centers for Medicare and Medicaid Services releases Star Ratings for Medicare Advantage plans based on services offered, pricing, customer service and member complaints. The ratings are free for anyone to see on the Plan Finder page. Simply enter your zip code, your current Medicare coverage status and any drugs you currently take. You can then choose to view Medicare Advantage plans with or without drug coverage.

The ratings will allow you to see how many stars (out of five) the plan was awarded, along with information about premiums, deductibles, coinsurance and more.1

U.S. News & World Report also shares an annual list of the highest-rated Medicare Advantage plans in each state.

Compare costs

Once you have found plans that fit your preferred type, offer satisfactory coverage for your needs, have received positive reviews and are available where you live, the next thing you can consider is comparing costs.

There are three key things you might want to consider when it comes to analyzing cost:

  1. Premiums
  2. Deductibles
  3. Cost sharing (coinsurance or copayments)

Would you rather pay a lower premium but absorb a higher deductible? Do you prefer to pay a higher premium but have a lower deductible? And what about cost sharing? Once again, the manner in which you wish to allocate your health care expenses may come down to personal preference and what you think you can afford.

When comparing costs, remember to factor in how much coverage each plan provides for any specific health care needs you may have and estimate how much you might have to pay for that particular need with each plan.

Medicare Advantage Enrollment

There are certain times of year when you may enroll in a new Medicare Advantage plan or switch from one plan to another:

Medicare Initial Enrollment Period

Initial Coverage Election Period (ICEP)

This is a 7-month period that begins three months before you turn 65, includes the month you turn 65 and continues for three more months thereafter.

Medicare AEP graphic

Annual Election Period (AEP)

Also called the Open Enrollment Period, this Medicare enrollment period runs from October 15 through December 7 of each year.

Special Election Periods (SEP)

A Special Election Period allows you to enroll in a Medicare Advantage plan outside of the other enrollment dates. Qualifying for an SEP requires that you fit certain situations such as:

  • Moving out of your plan’s service area
  • Qualifying for the Low-Income Subsidy program (known as Extra Help)
  • Having full Medicaid coverage along with Medicare
  • Living in a nursing home, skilled nursing facility or rehabilitation hospital

If you are currently enrolled in a Medicare Advantage plan but wish to switch to a different plan, you may do so during the Annual Election Period or if you qualify for a Special Election Period.

Medicare Advantage Eligibility

Of course, you can’t enroll in a Medicare Advantage plan unless you are eligible to do so. Qualifying for Medicare Advantage includes three requirements:

  1. You have both Medicare Part A and Medicare Part B (you will continue to pay your Part B premium with a Medicare Advantage plan).
  2. You live in the coverage area of the desired plan.
  3. You do not have end-stage renal disease (although there may be certain exceptions to this rule, so be sure to ask your agent if this applies to your situation).

Consider comparing, reviewing and choosing a plan according to your needs and plan availability to see if a Medicare Advantage plan may be right for you. Call today to speak with a licensed insurance agent.

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