With 65 birthdays and more years of work behind them than in front, Baby Boomers and Gen Xers look forward to successful retirement years. An important ingredient is maintaining their health as economically as possible on fixed incomes. Whether shopping for a friend, relative or yourself, learning about Medicare and Medicare Advantage is critical to choosing the right plan.
Within six months of one’s 65th birthday, and within annual open enrollment periods, it’s advisable to shop and compare plans. Basic Medicare with supplemental gap insurance policies (A, B, C, D, F, G, K, L, M, N) was instituted in 1965. It pays for most hospitalization charges and other medical costs, but not all. Medicare recipients have the choice of gap insurance — some with high or low deductible choices — to help pay for charges Medicare doesn’t cover.
Understanding the basic “Medicare Maze” might seem daunting, but it’s only a start in making wise choices, depending on personal health needs. Medicare Advantage plans offer an alternative to basic Medicare and fill needs much as the medigap plans do, but the “Advantage” plans are different. If choosing a Medicare Advantage plan, an enrollee doesn’t deal directly with Medicare, except for paying monthly premiums for Part B and perhaps Part D, that pay some of what basic Medicare doesn’t cover.
Medicare Advantage plans offered in most geographic areas take two forms: managed care plans and fee-for-service plans. Managed care plans charge a low or no monthly premium and small copays, but the plans limit enrollees’ choices of doctors and other providers. These plans limit treatments and length of hospital stays. With fee-for-service plans, any doctor or provider can be used if they accept Medicare and the Medicare Advantage plan’s restrictions and amount of payment. The enrollee can choose to pay the difference or select another provider.
Since Medicare Advantage plans are provided by private health insurance companies, enrollees must also evaluate the stability of possible choices and the geographic areas that each company chooses to cover. Whether the premiums and copays rise in price is another question to research. One’s local State Insurance Assistance Program, Health Insurance Counseling and Advocacy Program or the www.medicare.gov site can be accessed for these answers and comparative charts.
Some Medicare Advantage plans include the Medicare Part D prescription program, while other plans require enrollees to choose a separate stand-alone Part D plan. Compare the plans’ approved drugs, copays and premium costs.
Is the Medicare Advantage managed plan a Health Maintenance Organization (HMO), a Preferred Provider Organization (PPO) or a Provider Sponsored Organization (PSO)? HMOs maintain a network of physicians and providers who must be used unless there’s an emergency. Premium prices are usually the least expensive, but enrollees must make sure their hospitals, doctors and providers are “in network.” A negative to these plans occurs when the in-network listings change, and enrollees must travel to in-network doctors close to their area.
PPOs work much like HMOs, but these plans offer a point-of-service option, which lessens the cost to enrollees if they use an in-network provider. PPOs tend to have higher premium costs, but many enrollees like the flexibility of choosing doctors.
Private fee-for-service Medicare Advantage plans often have a cap on the amount of out-of-pocket payments an enrollee must pay each year. However, these plans have strict rules for providers, aren’t always accepted by providers and may charge for extra services and other costs.
Whatever the choice, remember it’s sometimes difficult to change from basic Medicare with gap insurance to a Medicare Advantage plan and vice versa. It’s best to make a wise choice, and review that choice annually.
Sources:
1. www.medicare.gov.
2. Social Security, Medicare & Government Pensions. Matthews, Joseph L., NOLO, 2021.
Editor’s Note:
Most cities in our market areas have professional insurance agents who are trained to help you determine which Medicare plan is best for you. Give one a call to get the process started!
Written by Virginia Riddle
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