What to consider when selecting a Medicare Advantage Plan

My Mom gets about $1100 a month in Social Security and has some savings to cover unusual expenses, but has no other significant income. She has looked at Medicare Supplement insurance, but has decided she really cannot afford the monthly premiums. A friend has suggested that she look into selecting a Medicare Advantage plan as a lower cost alternative to cover some of the deductibles and co-pays that Medicare does not cover, but she really does not understand how such plans work, or what to look for.

What is Medicare Advantage?

Medicare Advantage, or Medicare Part C, involves the federal government paying private insurance companies to provide the medical coverage which would otherwise be provided by Medicare Parts A and B, and sometimes D. The government pays the private insurer the amount it collects from individuals for Part B coverage, plus an amount representing the medical costs it might pay for each individual, plus an amount representing administrative costs. In return the individual who chooses Medicare Advantage receives all of his or her medical insurance coverage from the private insurer, not the government. The private insurer is required by law to provide coverage that is at least as good as regular Medicare at no additional cost to the individual.

In order to encourage people to sign up for Medicare Advantage, the private insurers generally provide coverage that is somewhat better than regular Medicare at no additional charge. Most also offer more comprehensive coverage for additional monthly premiums. Some companies offer several levels of coverage for different costs, and most offer the option of including Part D prescription drug coverage as part of the plan.

Medicare Advantage Provider Networks

The very first thing that should be considered when selecting a Medicare Advantage Plan is whether the health care providers you use regularly are part of the insurer’s provider network.  Your agent can look up your doctor to see if they accpet the plan.

Insurance companies can offer more coverage than regular Medicare for about the same price because they require the use of provider networks. This means that each company has entered into agreements with selected health care providers to keep their costs down. They may also have agreements with selected pharmacies regarding the cost of medications. Unlike regular Medicare, which allows you to go to any doctor that accepts Medicare, when you have a Medicare Advantage Plan you must choose doctors and pharmacies that are part of the provider network. There are usually exceptions for emergencies, but generally if you see a provider that is not in the network you end up paying significantly more.

Similarly, if you regularly use some medications that are particularly expensive or unusual, it would be a good idea to find out how those medications are covered by a particular plan. Not all companies will pay for the same medications. Most cover those medications frequently prescribed to seniors, but different ones treat more rarely prescribed drugs differently.

Co-pays and Maximum Out of Pocket

A co-pay is the amount you pay every time you see a doctor or use hospital services. Maximum out of pocket is the total amount you will have to pay in co-pays or deductibles in any one year. The maximum out of pocket varies from one company to another, but should be clearly stated as a lump sum.

Co-pays for doctor or specialist visits can also vary, but are fairly straight-forward. You will pay the amount stated each time you visit the doctor. If you are reasonably healthy and see a doctor rarely, you may wish to select a plan with a higher co-pay, if you can get a better deal in another area of coverage.

Hospital co-pays may be handled in different ways. Some plans require a single co-pay for each hospital admission. Others require a co-pay for each day of a hospital stay, either at a flat rate or until a maximum co-pay amount is reached for each admission. The difference in cost can be great.

Outpatient surgery co-pays can also vary a great deal. Some plans will have a single co-pay at a flat rate. Others will require a co-pay based on a percentage of the cost of a procedure.

Plan Comparison

Are you considering a Medicare Advantage Insurance Plan? To compare Medicare Advantage plans click here to request a quote or call 1-866-466-9118 to speak with a Benefit Specialist at Medicare Pathways. We can also do a free no-obligation review of your current Medicare Health Plan to see what meets your health and financial needs.