Medicare Advantage plans (Medicare part C) offer all the coverage of Medicare parts A and B along with additional benefits. These plans are sold by private insurance providers with the approval of Medicare.
Benefits and Coverage
Medicare Advantage plans cover benefits offered under the Original Medicare – be it for medical care or hospital care. So, any benefit that you qualify for under the Original Medicare (Parts A and B) will be covered by the Medicare Advantage plan.
But Medicare Advantage plans offer extra benefits. Depending on your location, you may receive additional coverage. For instance, Medicare Advantage plans in Texas may offer some extra benefits, which may or may not be available in California or any other state.
These extra benefits can be routine visits for dental, hearing, and vision care. Some plans may also offer an allowance or monthly funds for over-the-counter items, transportation charges, or even fitness memberships in facilities included in the plan’s network.
Most if not all Medicare Advantage plans to cover the cost of prescription drugs.
Anyone who is already enrolled in Medicare plans A and B is eligible to apply for Medicare Advantage plans. You also need to live in the service area where your plan is offered. An only exception is a person diagnosed with end-stage renal disease. Even then you may choose to enroll in a different type of Medicare Advantage plan called the Special Needs Plan. Your insurance provider may help you with it.
Premium and Other Costs
You need to pay an additional premium for your Medicare Advantage plan in addition to your plan B premium.
These plans also come with an out-of-pocket limit, which you will need to pay before you will be covered by your insurance. The out-of-pocket amount or limit is reset on a year to year basis.
Original Medicare doesn’t have an out-of-pocket limit. So, you may need to pay 20% (more or less) of the bills, unlike Medicare Advantage where you will only pay the out-of-pocket limit amount. Such a benefit can be very significant especially if the hospital or medical bills run into large amounts; say $40,000 or more.
Medicare Advantage plans come with co-payments, which is a percentage of the amount you pay and the rest is paid by the plan. It is usually a fixed amount, which helps you plan the expenses beforehand. For instance, you will know if your co-payment amount is $10 or $20 for a specific benefit or treatment. Such an option is not available in plan B where you have co-insurance.
Co-insurance is a fixed percentage. So, you will need to pay 10% or 20% on a certain bill. So, it is difficult to calculate it beforehand as you won’t know the bill amount until it is handed to you after the treatment is complete.
Medicare Advantage plans come with networks offering different types of coverage such as HMOs (Health Maintenance Organization), PPOs (Preferred Provider Organization). You need to choose the providers under your plan to accrue maximum benefits. If you choose a provider, not in your network then you may need to pay an additional fee or even pay the entire amount from your own pocket.
Other plans are POS (Point of Service), SNPs (Special Needs Plans), PFFS (Private Fee-for-Service), and MSA (Medical Savings Account). All these plans come with their own set of coverage, payment options, and other restrictions.
One big benefit of Medicare Advantage is that you can switch from your plan if you are not happy with it. The Medicare Advantage Disenrollment Period runs from 1st January to 14th February. You can utilize this period to switch from a Medicare Advantage plan to the original Medicare. You can also choose a standalone prescription drug plan under Medicare when switching your plans. But you won’t be able to choose another Medicare Advantage plan in lieu of your existing plan during this disenrollment period.During the open enrollment period (15th October to 7 December), you can switch your Medicare Advantage plans. You can even switch the plans during the 7-month period of your initial enrollment period (starting 3 months prior to a person turning 65).