Wondering How Medicare Advantage Plans Work?September 07, 2017
If you're planning to enroll in Medicare in the near future, you're likely doing your due diligence and researching all of your options, including Medicare Advantage. About one-third of Medicare members have chosen a Medicare Advantage plan to receive their health insurance benefits. And it's estimated almost half of the baby boomers now turning 65 will choose a Medicare Advantage plan. What is it about Medicare Advantage that makes it so popular?
- What Is a Medicare Advantage Plan?
Medicare Advantage plans, also called Part C or MA plans, are an alternative to Original Medicare. Many people choose a Medicare Advantage plan
because it can give them more coverage — without costing them much, if any, more than Original Medicare. These plans meet federal requirements to provide the basic benefits of Medicare Parts A (hospital insurance) and B (medical insurance), but they aren’t run by the government. Medicare Advantage plans are run by private insurance companies and usually include extra benefits you wouldn’t get from Original Medicare.
Medicare Advantage plans can feel familiar to many people because they're similar to health coverage offered through employers. The most common types of MA plans are:
- Health Maintenance Organizations (HMOs)
- Preferred Provider Organizations (PPOs)
- Private Fee-For-Service (PFFS)
- Special Needs Plans (SNPs)
Most Medicare Advantage plans include Medicare Part D (prescription drug coverage), bundling health insurance and drug coverage together to give you everything in one convenient plan. These are also known as MAPD plans. You'll find additional benefits vary by plan - and may include options like wellness services or vision, dental, and hearing coverage.
- How Do Medicare Advantage Plans Work?
For every individual who signs up for a Medicare Advantage plan, Medicare pays a fixed amount to the private insurance company, which then covers the individual's medical costs according to rules set by Medicare. In other words, when you choose a Medicare Advantage plan, Medicare will pay your plan administrator to cover the costs of your Parts A and B benefits.
Most Medicare Advantage plans make deals with doctors, hospitals, and other health providers to be in their network and accept reduced fees for covered benefits. This helps plans keep expenses lower and potentially pass on any savings to their members. That's why you'll find some Medicare Advantage plans offer $0 premiums.
Whether or not the Medicare Advantage plan you choose has a monthly payment, you will probably need to continue paying your Medicare Part B premium separately to Original Medicare. Also:
- You should expect to pay some out-of-pocket costs with any Medicare Advantage plan. These costs vary among plans and can include deductibles, copayments and/or coinsurance (a percentage of overall costs).
If your plan includes Medicare Advantage drug benefits
or other additional benefits, it may be included in your monthly payment or it may be a separate charge.
- All Medicare Advantage plans have an annual limit on your out-of-pocket health costs. Once you reach that limit, which differs by plan, you pay nothing for covered services the rest of the year.
- Your plan will have certain rules you must follow for services to be covered. For example, you may need a referral and/or preapproval to see a specialist for some procedures.
- Depending upon your plan, if you visit a doctor, hospital or other provider who isn’t in your plan, your costs could be higher or your services not covered — unless it’s an emergency.
- Medicare Advantage plans, benefits and costs can change annually. If you want to switch plans, you will need to do it during the Annual Enrollment Period (October 15 through December 7). There is a Special Enrollment Period, but you have to qualify for it.
One last thing to remember if you have
Medicare eligibility and choose a Medicare Advantage plan: When you get Medicare-covered services, you should use the card from your Medicare Advantage plan instead of your Original Medicare card.
Anthem Blue Cross and Blue Shield is the trade name of: In Colorado: Rocky Mountain Hospital and Medical Service, Inc. HMO products underwritten by HMO Colorado, Inc. In Connecticut: Anthem Health Plans, Inc. In Indiana: Anthem Insurance Companies, Inc. In Kentucky: Anthem Health Plans of Kentucky, Inc. In Maine: Anthem Health Plans of Maine, Inc. In Missouri (excluding 30 counties in the Kansas City area): RightCHOICE® Managed Care, Inc. (RIT), Healthy Alliance® Life Insurance Company (HALIC), and HMO Missouri, Inc. RIT and certain affiliates administer non-HMO benefits underwritten by HALIC and HMO benefits underwritten by HMO Missouri, Inc. RIT and certain affiliates only provide administrative services for self-funded plans and do not underwrite benefits. In Nevada: Rocky Mountain Hospital and Medical Service, Inc. HMO products underwritten by HMO Colorado, Inc., dba HMO Nevada. In New Hampshire: Anthem Health Plans of New Hampshire, Inc. HMO plans are administered by Anthem Health Plans of New Hampshire, Inc. and underwritten by Matthew Thornton Health Plan, Inc. In Ohio: Community Insurance Company. In Virginia: Anthem Health Plans of Virginia, Inc. trades as Anthem Blue Cross and Blue Shield in Virginia, and its service area is all of Virginia except for the City of Fairfax, the Town of Vienna, and the area east of State Route 123. Anthem Blue Cross and Blue Shield and its affiliate HealthKeepers, Inc. In Wisconsin: Blue Cross Blue Shield of Wisconsin (BCBSWi), underwrites or administers PPO and indemnity policies and underwrites the out of network benefits in POS policies offered by Compcare Health Services Insurance Corporation (Compcare) or Wisconsin Collaborative Insurance Corporation (WCIC). Compcare underwrites or administers HMO or POS policies; WCIC underwrites or administers Well Priority HMO or POS policies. Independent licensees of the Blue Cross and Blue Shield Association. ANTHEM is a registered trademark of Anthem Insurance Companies, Inc. The Blue Cross and Blue Shield names and symbols are the registered marks of the Blue Cross and Blue Shield Association.
This information is not a complete description of benefits. Contact the plan for more information. Limitations, copayments, and restrictions may apply. Benefits, premiums and/or co-payments/co-insurance may change on January 1 of each year. You must continue to pay your Medicare Part B premium.
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