Medicare Advantage Explained
Medicare Advantage, also known as Part C, is an alternative way to receive Medicare benefits through a managed care organization. These plans are becoming increasingly popular due to their low monthly premium and extra benefits, but these come with tradeoffs that you need to be aware of.
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Pro’s
of Medicare Advantage
Low Monthly Premium
Advantage plans typically offer much lower monthly premiums than you will find on a Medicare Supplement plan.
Part B Giveback?
Some plans may help pay all or part of your Part B premium.
Part D – Prescription Drug Plan included
Advantage plans typically offer much lower monthly premiums than you will find on a Medicare Supplement plan.
Maximum Out Of Pocket Limit
Original Medicare Part A & B have no limit on the maximum you can spend out of pocket. Thankfully, Medicare Advantage plans do have a yearly limit on what you can pay out of pocket for your hospital and medical coverage. These maximums average roughly $4,000, after which the plan will cover the rest. Note that the monthly premium and prescription drug co-pays do not count towards this maximum.
Additional Benefits
Many plans include additional benefits beyond what Medicare offers such as gym membership, dental and vision coverage, and more.
Con’s of Medicare Advantage
Co-Pays
Medicare Advantage plans have set co-pays for your services as you use them, think of it like a menu where you pay $x amount every time you go to the doctor and higher amounts per day in the hospital.
Networks
Similar to employer coverage, Medicare Advantage plans want you to stay within their network of doctors and hospitals. Going out of network will result in your paying a higher co-pay or 100% of the cost, depending on which plan you choose.
Catastrophic Coverage
Medicare Advantage plans limit your maximum out of pocket around $6,000 per year, but that still amounts to a large sum of money that many people simply don’t have budgeted for their healthcare. It is especially expensive when someone gets sick towards the end of the calendar year because their maximum out of pocket limit will reset on January 1.
Coverage for Cancer
Typically Medicare Advantage plans have a 20% coinsurance for cancer and chemotherapy.
Medicare Advantage Plan Types
There are several different types of Medicare Advantage plans that you can choose from. The main difference between them is how flexible your network of providers will be. Some plans require referrals to see a specialist and offer no coverage for non-network providers, while others allow more flexibilty.
PPO Plans
Preferred Provider Organizations
Has a provider network you can use but also offers more freedom to choose doctors and other providers outside the plan network for all covered services.
Out-of-network care MAY result in higher copays or coinsurance.
DOES NOT require you to get a referral for specialty services.
HMO Plans
Health Maintenance Organizations
Requires you to seek care from providers in your network and choose a primary care provider, who may then manage any care you receive from specialists.
DOES NOT cover any of the cost for care outside the plan’s network, except for emergency care, urgent care and renal dialysis.
MAY or MAY NOT require you to get a referral for specialty services.