A Medicare Advantage Plan is government-approved health insurance for Medicare beneficiaries that’s provided by private insurance companies. Beneficiaries evaluating Advantage Plans have a numerous options, including insurance providers, plan type, and additional benefits, including hearing, vision, dental, and prescription drug coverage.
Plans vary from county to county based on providers and provider networks. Most Medicare beneficiaries have access to at least one Medicare Advantage plan, and most counties have an average of 26 plans. Only the most rural counties will have limited or no access to Medicare Advantage plans.
More than 50 percent of all beneficiaries with an Advantage plan choose a Health Maintenance Organization (HMO) plan. Preferred Provider Organization (PPO) plans and Private Fee-for-Services (PFFS) plans are the next most common. Least used are the Special Needs Plans (SNP), HMO Point-of-Service plans, and Medical Savings Accounts.
Let your health care needs determine the benefits you choose
Because Medicare Advantage Plans are offered by private companies, there are a number of differences between the plans, including cost, additional coverage, and rules for obtaining services. Deciding what benefits are most important to you is the first step in determining which plan will best suit your needs.
- Do you require vision, hearing or dental care? If so, you check to see what these service would cost under different plans available in your area. A separate plan for these service could cost less.
- Do you have a primary care doctor you want to keep? Verify that your doctor accepts the plan you want before you enroll.
- Do you want to have easy access to medical specialists? Some plans, such as Health Maintenance Organization plans, may require you to obtain a referral from your primary doctor before you can visit a specialist.
- Do you need to visit a number of different doctors on a regular basis? If so, be aware that Preferred Provider Organization plans require you to pay higher out-of-pocket costs if your healthcare providers are not in their network.
- Do you have regular prescriptions? If so, consider a plan that also offers prescription drug coverage rather than enrolling in a separate Part D plan.
Determine which plans you can afford
For most of us, cost is the determining factor when choosing a healthcare plan. Unfortunately, figuring out how much a Medicare Advantage Plan will cost can be tricky. There’s a lot more to it than choosing the plan with a low monthly premium. In fact, with a low monthly premium comes a higher annual deductible before the plan picks up any of your healthcare expenses. Annual deductibles vary significantly and range from zero dollars to thousands of dollars.
In addition to premiums and deductibles, you need to consider copayments, for each doctor or hospital visit, and coinsurance. Your copayment and coinsurance amounts vary a lot, especially with plans that include prescription drug benefits. If you have regular prescriptions, take the time to find the plans that will save you the most money at the pharmacy and the doctor’s office.
The amount you are required to pay for the same medical service can also vary widely between Medicare Advantage Plans. That’s why it is important to make a list of all the medical services you use the most (labs, x-rays, chemotherapy, dialysis, etc.), and find out how much you would be required to pay out-of-pocket for those services under the different plans. Remember: If the plan includes a yearly deductible, you will often be required to pay 100 percent of your medical bills (excluding simple visits to the doctor) until the deductible has been met.
With the new healthcare law in place, all Medicare Advantage Plans must include an annual out-of-pocket maximum. This is the total amount you can be charged out-of-pocket per year for medical services. While many plans are below $3,500 per year, some plans may much higher maximums. It’s worth the time to consider each plan’s out-of-pocket maximum in your decision.
Enroll in the plan that best fits both your needs and your budget
Take the time to compare Medicare plans before deciding on coverage. For assistance with finding a Medicare Advantage Plan in your area, call 1-800-MEDICARE (TTY 1-877-486-2048).