As a professional independent insurance broker and the owner of Trusted Benefits Direct, it is my goal to provide you with quality information on how Medicare Advantage can be right for you. I will cover what Medicare Advantage is as well as if it could work in your situation or not based on key factors like income level and health status.
Medicare Advantage is literally a replacement for Original Medicare. It can be a great option, but you must get objective information before enrolling (independent agents are a great resource). MA can have restrictive networks. Not understanding MA can have life long effects on your health coverage.
Healthcare can be a confusing topic, especially for seniors. There are so many options and plans available, it can be difficult to determine what’s the right choice for you. Let’s explore whether or not Medicare Advantage is a good option for seniors. We’ll discuss the pros and cons of this plan, and help you decide if it’s the right choice for you. So, let’s get started!
How Many Medicare Advantage Plans Have no Premium?
Many Medicare Advantage plans throughout the US have a $0 monthly premium. You must always pay your Medicare Part B premium ($144.50 is the 2021 standard premium). There are some plans, mainly in southern California and Florida that offer a rebate of a portion of the Medicare Part B premium. I receive questions about how a Medicare Advantage plan can have a $0 premium. Private insurance companies can accomplish this through money sent to them by the CMS (Centers for Medicare and Medicaid Services). According to the 2021 Medicare and You handbook page 58, “Medicare pays a fixed amount for your coverage each month to the companies offering Medicare Advantage Plans.” https://trustedbenefitsdirect.com/wp-content/uploads/2020/09/2021-Medicare-and-You.pdf
Medicare Advantage Covers for Medicare Part A and Medicare Part B
Medicare Advantage plans cover Medicare Part A and Medicare Part B. Specifically, The Centers for Medicare and Medicaid Services (CMS) states that Medicare Advantage plans cannot charge more than Original Medicare. For certain services like chemotherapy, dialysis, and skilled nursing facility care.
Do Advantage plans have Part D?
All most all companies that offer a Medicare Advantage offer Part D coverage at no additional cost. As a result, the Medicare Beneficiary can also receive their medical coverage from the plan.
Is There a Trial Period for Medicare Advantage Plans?
Some Medicare beneficiaries will qualify for a Medicare Advantage trial period. There are two such instances. Firstly, when someone has turned 65 and enrolled in a Medicare Advantage. This beneficiary has a 12-month trial right. This means anytime during the first 12 months of enrollment. The Medicare Advantage plan the Medicare beneficiary can disenroll from the plan and enroll back in Original Medicare. This change will take place on the first of the next month after the request.
For example, if the Medicare Advantage beneficiary requested to be disenrolled on May 15. The changes would become effective on June 1. In addition, if the beneficiary wishes to purchase a Medicare Supplement after disenrolling. They may do so what is called a guaranteed issue. This means there are certain Medicare Supplement plans available to purchase that are not allowed to ask any medical questions as a condition of acceptance. As a result, the Medicare beneficiary may also be able to have all pre-existing conditions covered without a waiting period or exception.
What is a Trial Period in Medicare?
Secondly, is the trial period for those that already have Original Medicare and a Medicare Supplement. In this scenario, a Medicare Beneficiary chooses to enroll in a Medicare Advantage plan for the first time after being on Original Medicare and a Medicare Supplement. Any time during the first 12 months of being on the Medicare Advantage plan, the beneficiary may request to be disenrolled and return to Original Medicare. This scenario also triggers a guaranteed issue for the beneficiary to return to the Medicare Supplement plan and company the beneficiary had before enrolling in the Medicare Advantage plan. If the Medicare Supplement plan or company is no longer available, the beneficiary is entitled to choose from certain plans with any company.
Additional Benefits not Covered by Original Medicare
Medicare Advantage plans cover services not covered by Original Medicare. Some of these include dental, vision, hearing, rides to services, over the counter pharmacy items.
A Medicare Advantage plan can offer coverage for dental services. This may include cleanings, fillings, extractions, dentures, etc. It is all up to the individual to plan what they would like to cover. Usually, these services come with a copayment system attached to them. A copay is a fixed dollar amount a beneficiary would pay for a particular service.
Many times in the case of glasses the Medicare Advantage plan will pay up to a fixed dollar amount per year for glasses. In addition, the cost will be the responsibility of the Medicare Advantage member. For example, the Medicare Advantage plan may pay up to $150 per year for glasses. Any cost of the glasses over $150 will be the responsibility of the member.
Over the Counter Pharmacy Items
More and more Medicare Advantage plans are allowing members to choose from a list of items that would be available at a pharmacy. Depending on the Medicare Advantage company the items may include but are not limited to.
- Cold and flu liquids
- Compression hosiery
- Lens cleaners for glasses
- Ddult incontinence
The list is virtually endless. Many times what the Medicare Advantage will allow is a set dollar amount to be spent every quarter. For example, the Medicare Advantage company may allow $90 to be spent per quarter. Once per quarter, the beneficiary can fill out an order form and send it to the company providing the items. Benefits are usually administered through mail order. The benefit is usually what is a “use it or lose it” benefit. Meaning if the member does not use all of the dollar amount provided, the benefit will not carry over to the next over-the-counter benefit period. For example, if a member has $90 to use per quarter and only uses $80 in the current quarter, then they will not have $100 to spend the next quarter.
Does Medicare Advantage Offer Transportation?
Medicare Advantage plans can offer rides to and from providers and pharmacies. Most plans will offer a fixed amount of one-way trips per year. In detail, there is also a limit on the coverage distance of the ride. In most cases, the distance is adequate to see your providers and pharmacies inside of the county the beneficiary resides. The term one-way trip does cause concern for our clients who are new to the ride system. They are concerned the ride will only be provided to their doctor, and they will be responsible to get home on their own.
The reason the benefit reads one-way trips is this allows the member to make more than one stop for their health needs. If the benefit read round-trip then the coverage would likely go from their home to the doctor and return home. The one-way system allows for flexibility. For example, the member may go to their doctor and after their doctor visit, they need to go to a separate facility to have blood labs taken. After the blood labs, they can return home. This is an example of using three one-way trips. So, the one-way system certainly provides for more flexibility.
Do all Medicare Advantage Plans have an Out-of-pocket Maximum?
Before I get into the specifics, it is important to understand the maximum pocket costs the member will pay out of pocket before the plan will pay 100%. For example, I am asked sometimes if the maximum out of pocket is the maximum dollar amount of coverage the member has and after that number the member no longer has coverage. The answer is “no”. All Medicare Advantage plans have an unlimited amount of coverage.
The maximum out of pocket is the maximum dollar amount the member pays. Hence, after that number is met the plan will pay 100% of the costs. The maximum out of pocket is only for medical services for Medicare Part A and Medicare Part B. What a beneficiary pays for Medicare Part D prescription drug coverage does not count towards the maximum out of pocket. (CLICK HERE for more about Part D limits) Also, what is paid in extra benefits like dental, vision, hearing, etc. does not count.
What are the Most Desirable Benefits of Medicare Advantage Plans?
Maximum out-of-pocket is one of the most desirable benefits our clients find with Medicare Advantage. Outside of the $0 or low monthly premium is the maximum out-of-pocket. This maximum out-of-pocket allows the Medicare Beneficiary to have a maximum fixed dollar amount they know is the worst-case scenario for the year. In the same way, different companies can have different maximum out-of-pocket costs, but the limit the Centers for Medicare and Medicaid Services allow per year is $7,550 for in-network services and $10,000 for out-of-network services.
A Medicare Advantage plan has the option to set this amount anywhere from $0 to $7,550 for in-network services and $0 to $10,000 for out-of-network services. So now we have never seen a Medicare Advantage plan with a $0 maximum, but we do have many clients on plans with what we consider a low maximum. The lowest maximum out-of-pocket cost we have seen is $999 for the entire year. Our clients on this plan know the most they will spend in copays for the calendar year (January 1 to December 31) is $999. Therefore, once they have paid $999 out of their pocket for medical services, the plan will pay 100% of the costs for the rest of the calendar year.
Does Medicare Cover You Outside of the US?
Original Medicare does not cover beneficiaries outside the United States. However, certain Medicare Supplements (Medigap) may provide emergency coverage in a foreign country. The Medicare Supplement plans that offer foreign emergency coverage is: Plans C, D, F, G, M, and N. It is up to the individual Medicare Advantage plan whether they decide to provide foreign travel coverage and what the maximum amount of coverage is. If coverage is available outside the United States the coverage is only for emergencies. Routine medical coverage is not provided with plans outside the United States. If the member does have an emergency and they are in a foreign country they are usually responsible for all of the upfront costs. They may submit medical bills to their Medicare Advantage company for reimbursement minus any deductibles and copays the plan may have.
Does Medicare Advantage have a Network?
Most Medicare Advantage plans have some type of network the beneficiary must use. If the beneficiary receives services outside of the network for routine services most of the time the beneficiary will have to pay 100% of the costs. However, if the member has an emergency the Medicare Advantage plan must offer coverage. The same as if the emergency happened in the coverage area. Generally, there is not a reimbursement process like foreign travel emergency coverage. The member is responsible for any deductibles or copays if they apply.
Medicare Advantage can offer additional benefits. So, Original Medicare does not provide dental, vision, hearing, and other coverages and may do so with a premium as low as $0. As always, Medicare Part B premium must be paid on top of any premium even if the premium is $0. Medicare Advantage replaces Original Medicare of Medicare Part A and Medicare Part B. And the Medicare Advantage company may not charge more than Original Medicare would charge.
Many times Medicare Part D prescription drug coverage is included as well. That is to say, Medicare Advantage provides a trial right period. A beneficiary may opt-out during the first 12 months under specific circumstances. They also provide emergency coverage anywhere in the United States and may include foreign travel emergency coverage as well. Lastly, the maximum out-of-pocket provided will limit the amount a member is responsible for before the plan will cover 100% of Medicare and Part B medical costs.