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Understanding Medicare Advantage Plans
Currently known as Medicare Advantage (MA) plans, Medicare Part C was first introduced in 1997. Unlike the Original Medicare Plan (Parts A and B), MA is ran by private insurance companies approved by Medicare. The companies provide Medicare Part A and B services, and in some instances, also provide benefits not available under Medicare. Some of the insurance companies provide prescription drug — or Medicare Part D — coverage as part of their MA plans.
The main benefit of MAs is the cost — the copayments associated with them are often less than those for Medigap insurance and Medicare. Also, if the MA provides prescription drug coverage, those prices generally are cheaper as well. The primary disadvantage of MA plans is that most are run through a health maintenance organization (HMO) or a preferred provider organization (PPO), which can limit your freedom to choose which doctors, specialists and hospitals you will use for your medical care.
There are five different types of MAs to choose from. The most popular types are HMOs and PPOs, but you also can choose:
- Private Fee-For Services Plans (PFFSs) - unlike HMOs and PPOs, you can use any provider that will accept the insurance plan. The insurance company, however, and not Medicare, decides which services it will pay for and how much it will pay for those services.
- Special Needs Plans (SNPs) - these plans are aimed at providing services for people with special care needs, like those with chronic illnesses or multiple diseases. As such, these plans may be only available to certain populations, such as those who live in nursing homes or those who are eligible for both Medicare and Medicaid.
- Medical Savings Account Plans (MSAs) - these plans will not begin paying benefits until you have met the annual deductible amount. The plan also has a savings account attached to it, which Medicare deposits money into to help pay for your health care costs.
The costs associated with each MA plan will vary depending on the types of benefits and coverage you want, among other factors. It is important to shop around with different insurance companies before selecting one of these policies to ensure you are receiving the benefits you want at a cost you can afford.
In order to be eligible for an MA, you must be enrolled in Medicare Part A and Part B. You will not need a Medigap policy once you have an MA. In fact, if you have a Medigap policy, it will not work while you also have the MA. Before you decide to drop an existing Medigap policy, however, you should speak with your insurer. Once you drop the policy, you may be unable to get it back, should you later decide you prefer Medigap coverage over MA coverage.
While it is not required that you purchase additional health insurance coverage in order to use your Medicare benefits, it is something you should consider. Medicare may not meet all of your health care needs and if you do not have the personal resources to pay for the care you need, Medicare Advantage plans may provide you with that extra peace of mind.
Preparing to Meet with Your Estate Planning Attorney
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Preparing to Meet with Your Estate Planning Attorney
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