Everything You Should Know About Medicare Advantage
If you’re about to hit your golden years, then you’re probably aware of the significant decisions that come with retirement. One of these is deciding which healthcare plan is the right fit for you.
The original Medicare program has been around for over half a century. It consists of hospital insurance (“Part A”), outpatient services (“Part B”), with prescription drug expenses (“Part D”), and Medigap coverage coming separately.
Although it’s a tried-and-trusted option with 38 million people using it, this government-funded plan still has some drawbacks. It doesn’t come with crucial coverage elements that many retirees want.
This might be why about 18 million out of 56 million people opted for the popular alternative, Medicare Advantage. Also known as “Part C,” it combines Parts A and B, and usually Part D. Some plans even come with additional advantages like vision, hearing, and dental coverage. Medigap coverage isn’t required, either.
Private insurance providers offer Medicare Advantage plans, so the precise premiums, deductibles, and benefits vary depending on the company. In our article, we’ll tell you everything you need to know about this popular alternative.
What is Medicare Advantage?
As previously mentioned, it’s an all-inclusive healthcare plan that combines hospital, medical, and, sometimes, prescription drug coverage. You’ll get the same benefits listed in Parts A and B of the traditional Medicare program.
Depending on your provider, prescription drug expenses might not be included. If this is something you need, it’s best to find a Medicare Advantage policy that does cover it. Alternatively, you could opt for a supplementary Part D plan.
You’ll pay a private insurance company that works with the Federal government to provide Medicare services. However, out-of-pocket expenses are capped. Once you’ve hit that threshold, medical services won’t cost you anything for the rest of the year. Original Medicare doesn’t have this benefit.
There are different kinds of Medicare Advantage plans. These include:
- Preferred Provider Organizations (PPO)
- Health Maintenance Organizations (HMO)
- Special Needs Plans (SNP)
- Private Fee For Service (PFFS)
Each of these come with specific advantages, drawbacks, and benefits. Here’s a quick rundown:
A PPO plan offers a network of healthcare facilities and personnel. It also gives you the freedom to choose hospitals, doctors, and specialists not included on the list of “preferred providers.” However, you’ll still pay more if you do this.
Unlike other plans, you don’t need a referral before seeing a specialist. It’s an ideal option if you have regular medical appointments.
With this plan, you can only choose healthcare providers that are part of the network. It’s generally more restrictive than a PPO but tends to be cheaper.
If you don’t mind finding a new primary care physician, (PCP) or if yours isn’t on the list, then it might be a worthwhile choice. HMO plans also require you to get a referral before seeing a specialist, which is something to consider as well.
Private Fee-For-Service plans are offered by private health insurers. Unlike HMOs and PPOs, you can use any Medicare-approved hospital, doctor, or specialist. However, your plan must be accepted, and the medical personnel have to agree to give you treatment.
Some PFFS plans also have a set of preferred providers. If you use medical services outside of the network, you’ll pay more. Emergency care is included, too.
A Special Need Plan provides coverage for people with limited incomes, certain diseases, and selected health care requirements. You could be eligible to apply for an SNP if:
- You have Medicare or Medicaid
- Reside in a nursing home or need nursing care
- Suffer from certain chronic or autoimmune disorders and diseases including cancer, diabetes, stroke, liver conditions, HIV/AIDs, and more
It gives access to medical treatment in-network and covers prescription drugs. Certain care that can only be done elsewhere, such as dialysis, is also included.
The Pros and Cons of Medicare Advantage
All health insurance policies come with benefits and drawbacks. Here are some of the most pertinent ones for Medicare Advantage:
- Additional benefits – Medicare Advantage offers the same coverage as Parts A and B. However, the plans can include extras like routine dental and vision care, hearing aids, gym memberships, and prescription drug costs.
- Limited out-of-pocket expenses – Unlike original Medicare, once you’ve reached your maximum, you won’t pay anything for the rest of the year.
- Lower premiums – While private insurance providers determine monthly fees, these tend to be cheaper than traditional plans. Moreover, you don’t need to buy Medigap coverage.
- Convenience – Some of these plans are all-inclusive with a network of preferred providers. This makes it easy to coordinate medical appointments.
- Referrals and pre-authorizations – Depending on your type of plan and the required treatment, you may need to visit your PCP first before seeing a specialist.
- Freedom of choice restrictions – Your options may be limited to in-network hospitals, specialists, and doctors.
The Bottom Line
Choosing health insurance can seem daunting in your golden years. You’ll need something that meets all of your requirements. Medicare Advantage plans are more flexible than their original counterparts and usually provide extra coverage.
They come in various forms, including PPOs, HMOs, SNPs, and PFFS’s, so there are more than enough options. While all plans have pros and cons, under Medicare Advantage, the benefits are certainly attractive.
Whatever you decide, make sure to choose a plan that fulfils all of your medical needs.