Medicare clients have the option of receiving their benefits through Original Medicare, Original Medicare and a a Medicare Supplement, or a Medicare Advantage Plan. Under Original Medicare, your benefits would be partially paid for by the federal government. Medicare Advantage Plans, on the other hand, are offered by private companies who are approved by Medicare. Medicare then pays these companies to cover your benefits.
A Medicare Advantage Plan provides clients with Medicare Part A (hospital insurance), and Medicare Part B (medical insurance) coverage, and in some cases Part D (prescription drug coverage) .
Types of Medicare Advantage Plans
There are various types of Medicare Advantage Plans available to clients, each with varying degrees of coverage. Some of the most common types of Medicare Advantage Plans are:
- Health Maintenance Organization plans: This plan limits coverage to care from doctors who work for or contract with the HMO. It generally does not cover out-of-network care except in an emergency. An HMO also requires you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness.
- Preferred Provider Organization plans: A PPO contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You will pay less if you use the providers within that network. You can use doctors, hospitals, and providers outside of the network, but you will have to pay additional costs.
- Private Fee-for-Service plans: PFFS plans are similar to Original Medicare in that clients can visit any doctor, health care provider or hospital so long as they accept the plan’s payment terms. The plan will determine how much it will pay doctors and hospitals as well as how much you must pay when you receive care. The doctor, care provider, and plan can choose to accept the payment one time but then decline it another. They must see if it is an emergency.
- Medicare Medical Savings plans: These plans combine a high-deductible insurance plan with a medical savings account that you can use to pay for your health care costs. That means the plan will only begin to cover your health care costs once you meet a high yearly deductible, and that amount varies by plan. But the plan also deposits money into a special savings account for you to use to pay for health care costs before your deductible is met.
To be eligible for a Medicare Advantage Plan, you must have Medicare Parts A and B and live in the plan’s service area. Medicare Advantage Plans must cover all of the services that Original Medicare covers with the exception of hospice care. It is important to remember that each plan has different premiums and costs for services, so make sure you compare plans in your area before joining.
What Is Medicare Advantage Plan Part D?
Most Medicare Advantage plans include prescription drug coverage through Part D, MAPDs. These plans must give at least a standard level of coverage as determined by Medicare, but plans can vary in which pharmacies they use, which prescription drugs they will cover, and how much they will charge for them.
For example, Medicare drug plans contract with pharmacies in their “network,” so if you go to a pharmacy that isn’t in your plan’s network, your drugs might not be covered or you will pay a higher co-pay/co-insurance. Likewise, many Part D plans place drugs into different tiers, with each tier requiring a different cost. Preferred generic drugs would likely be placed in the first tier, meaning they have the lowest co-payment. Drugs that fall in higher tiers would then have increasing costs. Generic drugs can be placed on all tiers, however, so a generic drug will not always be on tier 1 or tier 2; this determination is up to the plan provider.
Who Qualifies for and Benefits from Part D Coverage?
If your Medicare Advantage Plan offers prescription drug coverage, you must use that plan. If you are on a Private Fee For Service (PFFS) Medicare Advantage Plan that does not offer Part D, then a stand-alone prescription drug plan is an option for you. In all other instances, you cannot combine a Medicare Advantage Plan with a Stand-alone prescription drug plan. Anyone who is enrolled in Part A and/or who is currently enrolled in Part B can obtain Part D coverage. Enrollment is voluntary except for people who also receive benefits from Medicaid or Medi-Cal. If you are receiving those benefits, the program will automatically enroll you in Medicare Part D coverage to cover prescription medical coverage if you do not do so yourself. The caveat is that Medicaid will not look at your drugs and put you on the most cost-effective plan. They will just rotate through their list and put you on a plan that may or may not be cost effective for you. Hence, you are at an advantage to see a licensed agent that promotes multiple plans.
Part D is beneficial to most people who qualify for Medicare coverage and do not otherwise have drug coverage. This type of coverage can minimize the costs associated with paying for medications for most ailments.
When Can You Sign Up for an MAPD?
There are specific times when individuals can sign up for an MAPD. The first opportunity is when you first enroll in Medicare. You can sign up during a seven month period: the three months before the month you turn 65, the month you turn 65, and the three months after the month you turn 65. The same seven-month period is used for individuals who are eligible for Medicare due to a disability.
If you have recently enrolled in Part B coverage (Jan. 1 through March 31), you then have from April 1 through June 30 to add a MAPD to your repertoire for a July 1st effective date . You can also make changes to your Medicare Advantage and prescription drug coverage when you experience a significant life event, such as moving or losing other insurance coverage.
And of course, each year you have the chance to make changes to your Medicare Advantage Plan during the open enrollment period, which takes place from Oct. 15 through Dec. 7.
With numerous options in MAPD plans to select from, it is nearly always advisable for individuals to consider this form of health insurance with the help of Medicare Agents.