MEDICARE ADVANTAGE PLANS
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While Medicare Supplements are the most comprehensive of all Medicare gap products, they are usually more expensive than the Medicare advantage plans. Medicare Advantage plans are traditionally less expensive than Medicare Supplements because there are more gaps in benefits. MA's usually have deductibles and co pays.
What are Medicare Advantage plans? Why do some plans charge no monthly membership fee? Are they really free? We will answer the last question with a rhetorical question of our own; do you usually get what you pay for?
First of all the advent of Medicare Advantage plans is an offspring of the federal government's insatiable appetite to get out of the insurance business as much as possible. While Original Medicare as it is now being called is not without flaws, it is a quite comprehensive health plan for seniors at a very fair price. The federal government would rather have commercial insurance carriers assume the insurance risk, as well as to have them service the resulting policies. This is basically what's happening with a Medicare Advantage plan.
When a member enrolls in a Medicare Advantage plan he / she gives up the right to original Medicare. The Medicare part B premium that is deducted from the individual's Social Security check goes directly to the insurance carrier as payment, along with other predetermined subsidies based on the overall health of the individual. The more sickly the individual is, the greater the reimbursement to the insurance carrier. Instead of the normal 80% coinsurance present in Original Medicare, the Medicare Advantage plan determines the coinsurance percentages for various health issues. The MA determines its own hospital deductibles and co pays.
Usually an MA is at least a little better than carrying Medicare without any Medicare Supplement. Many times it is only a little better. Sometimes, it's a lot better! Our main concerns lay in radiation treatments and specialized medical equipment such as oxygen, wheelchairs, special hospital beds and artificial limbs. These are not needed often, however; can prove costly when the unexpected need comes to fruition. Some MA's have no annual out of pocket maximums. Others have $5,000 annual maximums. We don't recommend MA's with out of pocket maximums of more than $2,000 annually. We prefer MA's with $500 annual out of pocket maximums or lower. The savings in up front lower premiums must be justified by some financial certainty! PLEASE CLICK HERE FOR MORE ON ORIGINAL MEDICARE.
Health tends to be the main caveat to these plans. There are virtually no health questions as requirements to enroll in one of these plans, however; individuals with major health issues are better served with a Medicare Supplement. If an individual chooses to switch to a Medicare Supplement at a later date, when their health deteriorates, he / she could be turned down because of health issues.
More troubling than the former issues discussed are the lack of standardization and regulation for these plans. Medicare Supplements are strictly regulated and standardized to the point that benefits are exactly the same from company to company. While MA's are customized hybrids, the more important issue is that the plans may be changed by the insurance carrier each and every year. The caveat here is that a disgruntled member with health issues may not have guaranteed acceptance into a Medicare Supplement after his /her health deteriorates. PLEASE CLICK HERE FOR MORE ON MEDICARE SUPPLEMENTS.
We have seen insurance companies increase premiums seemingly indiscriminately. We have seen deductibles and co pays change. We have seen out of pocket maximums increase from year to year. We have seen carriers introduce attractive products one year, only to see these products disappear in a year or two. Blue Cross Blue Shield providers have been notorious for this practice.
On the other side of the coin, we have also seen numerous insurance carriers introduce highly competitive pricing for Medicare Supplements, only to jack prices way up a year or two later. However; the products themselves do not change. Medicare Supplements pay for virtually all Medicare benefit gaps other than prescription, (covered by Medicare part D prescription plans) vision and dental.
The other striking difference between Medicare Supplements and Medicare Advantage plans is that the later introduces the managed care concept of limited provider networks. Medicare Supplements are accepted at any provider nationwide, most Medicare Advantage plans are not.
Medicare Advantage plans may be stand alone MA's or MAPDP (Medicare Advantage with prescription drug plan attached. For explanation purposes we will focus on the stand alone plans.
There are basically 3 major types of MA's: Private Fee for Service, (PFS) Preferred Provider Organization, (PPO) and Health Maintenance Organization (HMO).
The Private Fee for Service allows the member to go to any health provider that will accept it. This verbiage sounds a bit nebulous, however; in theory most providers should accept assignment. The verdict is still out; PFS's are the newest type of MA.
HMO's restrict the member to purchase healthcare only from providers within the network. Some networks are quite large. Most BC / BS networks are quite large and can work out well. If the member does any extensive traveling, we do not recommend an HMO or a PPO for that matter. Even BC / BS networks don't work out of area and certainly not out of state.
The PPO expands the provider availability, by allowing the member to go out of network, however; not without penalty. There is usually a 20 ? 40% penalty for going out of network.
Just a short not on MAPDP's, which are Ma's with the prescription part D attached: we prefer to purchase them part D separately! PLEASE CLICK HERE FOR MORE INFORMATION ON MEDICARE PART D PRESCRIPTION PLANS.