Medicare Advantage (Part C) and Medicare Supplements (Medigap)
With the annual enrollment period around the corner, a lot of Medicare beneficiaries are looking at their plans to determine if it still fits their needs. It is always a good idea to review your current plan to see if there are any changes and determine if it still meets your health needs, lifestyle, and budget. When it comes to covering cost for Medicare, there are two popular options beneficiaries have to choose from: Medicare Advantage (aka Part C) and Medicare Supplements (aka Medigap). I will discuss Medicare Supplements and Medicare Advantage options and review some of the highlights of both of these plans.
Medicare Supplements are insurance policies that help to cover some of the costs not covered in Original Medicare (Parts A/B). These policies are sold by private insurance companies like Humana, Aetna, Blue Cross Blue Shield, etc. Supplement plans help with some of the co-pays, coinsurance, deductibles, and medically necessary supplies and care. Here is how these plans work for all Medicare approved services: Original Medicare will pay its portion first up to its limits, then your Medicare supplement pays its share, you will be billed for remaining charges, if any. With Medicare supplements, you do not have to worry about networks or referrals. You may visit any doctor or hospital that accepts Medicare.
There are 10 lettered supplement plans that beneficiaries can choose from: Plan A, B, C, D, F, G, K, L, M, and N. It is important to note that all supplement plans are “standardized”. This means that supplement policies “must follow federal and state laws designed to protect you, and policies must be clearly identified as ‘Medicare Supplement Insurance.’ Each standardized Medigap policy must offer the same basic benefits, no matter which insurance company sells it.”^1 In a nutshell, this means regardless of the insurance company that offers the plan, they all cover the exact same thing. For example, if you wanted a Plan G supplement, every insurance company that offers Plan G will offer the exact same benefits and coverage. However, the only difference is insurance companies can charge a different price for their plans. Therefore, it’s wise to shop different insurance companies when looking for supplements. Insurance companies are becoming more competitive with these plans. Since they are all standardized and there is no difference in benefits (as long as you are comparing the same lettered plan), the cost savings go to you. Be aware that when you change supplements from one company to another, you may need to health qualify before the new company will accept you.
Medicare Advantage is an “all-in-one” plan that bundles Parts A and B and often Part D together. These plans are offered by private insurance companies that take on the coverage you would have received with Original Medicare and offer additional services. These services could include dental, vision, hearing, gym memberships, transportation, prescription drugs, and more. Benefits like these are not offered by Original Medicare.
MA offers several types of plans to choose from like HMO, PPO, PFFS, and SNP. Because these plans operate within certain networks, so where you live is of the utmost importance when selecting an MA plan. Insurance companies offered plans based on counties, population, and availability of doctors and hospitals. Therefore, plans may look different from one county to another. Also, if you have a PCP (Primary Care Physician), you must ensure that your doctor accepts the plan that you are considering. MA plans are also generally cheaper than supplement plans; some plans are as little as $0/month. While the monthly premiums are a lot less, MA plans do have co-pays, coinsurance, and annual deductibles to be aware of. Make sure that you review your summary of benefits and/or evidence of coverage to fully understand what your financial responsibilities may be.
There are two enrollment periods to be aware of when considering Medicare Advantage: Annual Enrollment Period and Open Enrollment Period. From October 15th – December 7th each year is the Annual Enrollment Period. During this time, beneficiaries can choose new advantage plans based on what insurance companies are offering in their area. They may switch plans as many times as they wish during this period, but whatever plan they have in place as of December 7th is the plan that will go into effect next year. Advantage plans are active from January 1st – December 31st each year. The Open Enrollment Period OEP) goes from January 1st – March 31st each year. During this time, Medicare Advantage enrollees are able to make a one-time switch to a different Medicare Advantage plan or drop their advantage plan and return to Original Medicare.
There is a lot to consider when you are thinking of a Medicare Supplement or a Medicare Advantage plan. I often work with my clients to find out their specific needs before recommending one of these two options. If you have questions about your plan or have concerns about if it is still meeting your needs, give me a call and we can schedule an appointment for a free comprehensive, personalized Medicare consultation.
^1 2020 Choosing a Medigap Policy pg. 9