When you’re exploring insurance options for your retirement, Medicare Advantage Plans can be worth considering. Medicare Advantage Plans are a kind of medical insurance that differs from the traditional – also known as “original” – Medicare option.
Also called Medicare Part C, Medicare Advantage Plans often include typical Medicare Part A and Part B coverage, and some also handle Part D and add in some extra perks. However, this option isn’t ideal for everyone. As a result, part of your Medicare checklist should include evaluating these options carefully to control your Medicare costs and get the right coverage. If you aren’t sure where to begin, here are 15 things you need to know before enrolling in a Medicare Advantage Plan.
1. Medicare Advantage Plans Are Still Medicare
While Medicare Advantage Plans are offered by private companies, they’re officially considered Medicare programs. Medicare contracts with these organizations to provide services, so they meet any requirements for signing up for Medicare when you reach the designated age.
2. You Maintain Your Medicare Rights
With a Medicare Advantage Plan, you maintain all of the traditional rights and protections available with Original Medicare. This includes everything from protection from discrimination to the right to privacy to proper access to medical services, and more.
3. You Might Be Limited to a Network
Original Medicare is accepted at a wide range of medical facilities. If you sign up for that plan, you can essentially use any provider that accepts Medicare, including if you travel out-of-state. This provides a significant amount of flexibility.
With a Medicare Advantage Plan, you may have to use in-network providers to get the most out of your coverage. In many ways, this isn’t unlike medical insurance you may have through an employer, as most of those are network-based.
Going out of network when you have a Medicare Advantage Plan can lead to unexpected out-of-pocket costs. As a result, knowing where your plan is accepted is essential.
4. Getting Approvals May Be Necessary
In many cases, Original Medicare doesn’t require many pre-approvals to receive a doctor-prescribed medication or treatment. Again, this makes using Medicare reasonably streamlined and can make accessing treatments or prescriptions quickly easier.
With Medicare Advantage Plans, you might need pre-approval for specific medical services or treatments. Depending on the insurer, this may take time. Additionally, if your request is denied, you may have to go through lengthy appeal processes or ask that your doctor outline another course of treatment — one that may not be as ideal as the first.
5. Some – but Not All – Medicare Advantage Plans Offer More Coverage
As mentioned above, Medicare Advantage Plans often combined Part A and Part B coverage, and most also include Part D for prescriptions. However, you might get access to even more, as some insurers will bundle in dental, vision or hearing benefits.
The trick is that the extra coverage isn’t universal. As a result, you shouldn’t assume that you’ll get anything beyond Part A and Part B coverage. Instead, research what the plan actually provides so you don’t make a decision based on an inaccurate assumption.
6. Your Out-of-Pocket Costs May or May Not Be Lower
One of the reasons people explore Medicare Advantage Plans is to lower their out-of-pocket costs. You may have smaller deductibles or copays, for example, compared to Original Medicare.
However, the exact costs can vary dramatically from one Medicare Advantage insurer to the next. Coverage levels may shift, copays may vary, and deductibles can differ. Consider what your healthcare needs involve, allowing you to estimate whether you’d capture savings. Along with exploring several Medicare Advantage Plans, you want to see how your costs would turn out if you chose Original Medicare, as it may be the better deal.
7. Your Premium May Be Higher or Lower
As with out-of-pocket costs, premiums vary from one Medicare Advantage provider to the next. In some cases, your premium may be more than if you stuck with Original Medicare. At times, the cost increase means getting more benefits or lowering other expenses, so you’ll need to examine the options from a value perspective to determine which is the best fit.
However, there are cases where a Medicare Advantage Plan can have a lower premium. Whether these are offset by higher deductibles or copays does vary, so don’t focus solely on the premium when making a choice.
8. Medigap Isn’t Necessary With Medicare Advantage Plans
Medigap – a supplemental insurance option for Original Medicare – can help cover out-of-pocket expenses not covered by Original Medicare or other insurance you may have, such as Medicaid or coverage through employers or unions. It’s designed to offer some financial protection, as Original Medicare on its own has no yearly limit on out-of-pocket expenses.
With Medicare Advantage Plans, Medigap isn’t necessary. Primarily, this is because there is a preset annual limit on out-of-pocket services for the Part A and Part B portions of the coverage. When you hit that limit – which can vary by insurer – you won’t pay anything else out-of-pocket for your Part A- and Part B-related medical care.
9. Medicare Advantage Plans Must Cover Everything Available Through Original Part A and Part B
While Medicare Advantage providers can choose some of the benefits they provide, they are required to cover all medically necessary supplies and services that Original Medicare offers through Part A and Part B. However, Medicare Advantage insurance may require you to get approval for certain treatments, supplies or services in advance, while Original Medicare typically does not.
10. Enrollment Is Limited to Specific Times, and You Can Only Make Changes Once Per Year
With a Medicare Advantage Plan, you’re typically committed to that plan for a full year. Open enrollment for Medicare Advantage Plans only from January 1 to March 31 each year, which gives you a three-month window to choose new policies or transition to or from Original Medicare options. There is also an open enrollment period for Medicare Advantage and Medicare drug coverage from October 15 to December 7.
However, during the Medicare Advantage Plan open enrollment period each year, you can only change insurers once. As a result, you want to make sure you explore all of your options before initiating a change.
11. Medicare Advantage Plans Are Open to Those With Pre-Existing Conditions
Having a pre-existing condition doesn’t make you ineligible for a Medicare Advantage Plan. As with Original Medicare, once you’re eligible to join, the current state of your health largely doesn’t restrict your options.
12. Medicare Advantage Provider Networks May Change Over Time
While you may join a particular Medicare Advantage Plan because your preferred doctor is in-network, there’s no guarantee they’ll remain a covered provider long-term. Providers are allowed to join or leave a network at their discretion. The insurer can also make changes throughout the year.
A preferred provider leaving a network doesn’t give you the ability to change your Medicare Advantage Plan to another insurer at the moment of their exit. Instead, you’ll either need to find a new provider or wait until open enrollment to select a new plan that has that provider in its network.
13. Medicare Advantage Plans Can’t Charge More for Specified Services
Certain services – such as chemotherapy or skilled nursing home care – offer some cost protections if you go with a Medicare Advantage Plan. Medicare Advantage Plans aren’t allowed to charge more for specified services, ensuring they stay in line with Original Medicare.
However, Medicare Advantage providers do have the option to charge less for those specified services. Additionally, services that aren’t listed with charging restrictions could cost more through a Medicare Advantage Plan, though that isn’t always the case.
14. Insurers Can Stop Offering Medicare Advantage Plans
While it isn’t typical, insurers that offer Medicare Advantage Plans do have the right to end their participation in the program. Should that occur, you’ll either select another Medicare Advantage Plan or go with Original Medicare. Depending on when this happens, you may have to stick with the new plan for up to a year, as making a subsequent change isn’t possible until open enrollment.
Even though this isn’t a common situation, it isn’t a bad idea to have a second-choice option in mind. Then, if your current insurer stops offering Medicare Advantage Plans, you already have a potential target for your new policy, allowing you to transition quickly.
This isn’t something that typically occurs without some notice. As a result, if you don’t have a second-choice option in mind, you’ll usually get a window of time before your current policy formally ends, allowing you to explore potential replacements and ensure continuous coverage.
15. You’re Limited to One Medicare Advantage Plan at a Time
While using multiple Medicare Advantage Plans to cover gaps and reduce out-of-pocket expenses may seem like a solid choice, it isn’t an option. Instead, you’re limited to just one Medicare plan at a time. As a result, you’ll want to make your selection carefully.
Additionally, if you’re interested in supplements, you want to find compatible options. Each supplemental insurance plan is different, so comparing them to your Medicare coverage options is essential.
