Medicare Advantage (MA) plans, sometimes
called Part C, do not replace Medicare, but pay instead of Medicare. Enrolling
in a MA or MAPD (Medicare Advantage with Part D included) is very much like
assigning your Medicare benefits to an insurance company.
HOW THEY WORK
An insurance company contracts with the
Centers for Medicare and Medicaid Services (CMS) to administer Parts A, B,
and Part D Rx coverage of Medicare in specific
geographical service areas. An Advantage plan may deliver services as an HMO
(Health Maintenance Organization model), PPO (Preferred Provider Organization),
Private Fee for Service (PFFS), Special Needs Plan, or MSA (Medical Saving
Account). The plans I represent are HMO, or HMO/PPO with Part D included (MAPD
or MAPD/PPO). Although MA HMO plans without Part D are available, it is best to
include Part D with your Medicare Advantage plan (MAPD). MAPD plans with a PPO
option are offered only in certain zip codes at additional premiums. MAPD
monthly premiums range from -0- to over $100- depending on the service area zip
code and if a PPO option is available and selected. The Part D Rx part included
in a MAPD plan is a fixed benefit with usually only one formulary (list of
covered drugs) available.
If a Medicare Advantage plan with Part D
Rx included is at -0- premium, why enroll in a Medicare supplement Medigap
alphabet plan (A, F, G, N, etc.)?
1. To protect your insurability. On the
hierarchy of plans, Plan F would rank higher in benefits compared to Plan A,
and all would be considered richer than a Medicare Advantage HMO plan. But it
is not an accurate comparison, because if you drop an MA (Medicare Advantage) plan, you return to
Original Medicare. With a Medicare supplement Medigap policy, you never leave
original Medicare. You must prove your insurability if you want to apply for a
Medigap alphabet plan, unless you have a special enrollment period (SEP). For
instance, an insurance company leaves Medicare, drops the plan, or you move out
of the plan’s service area, or when you are in your Initial Enrollment Period
2. Drug Formulary. With a Medigap alphabet
plan, your prescription drug Part D coverage will be in a separate stand-alone
policy. You have the option to select the Part D plan which meets your
medication needs within your budget. Medicare Advantage plans with Part D
included contain a formulary which may or may not meet your needs.
3. Government regulations. MAPD plan’s
benefits and premiums increase because the MA is paying instead of Medicare.
You can return to Original Medicare (Parts A and B), but you lose your Medicare
Advantage benefits as a form or supplemental coverage. With a Medigap plan, you
can move to another alphabet plan of equal or lesser value in order to reduce
premiums, if necessary. Or, enroll in a Medicare Advantage plan during the
Annual Enrollment Period (AEP). In other words, you have options.
4. Most MA plans are HMOs. Beginning in
2013, Medical Loss Ratio (MLR) rules and frozen benefit levels will be imposed
to control health care costs. Political and economic forces will pressure the
government to constrain future benefit/cost ratios because Congress controls Medicare
Advantage plans administered by insurance companies. Medigap plans are
regulated by the states and supplement parts A and B of Medicare. So, as Social
Security Medicare benefits change, a Medigap plan will adjust to meet the gaps
5. Echelon tier health care. As more
people enroll in Medicare and the uninsured population meet the mandate to get
health insurance in 2014, the health care delivery system, (doctors, hospitals,
labs, clinics, etc.), will be confronted with greater demand for their services
without a commensurate increase in providers. Medigap policyholders will rank
higher in the echelon of benefit tiers, because their plans pay providers more
for their services-especially Plan F members. Already, some doctors are
demanding concierge service fees as a source for additional income to their
practice. Medicare Advantage plans are HMOs, and do not have the same financial
leverage to pay healthcare providers if the government reduces the monthly fees
paid to insurance companies for plan administration.
SO, WHY ENROLL IN A MEDICARE ADVANTAGE
1. -0- dollar premium, or at least lower
premiums. A Medigap plan F monthly premium could be $150- or more at age 65,
and will increase with age. Part D Rx monthly premiums range from about $15- to
over $100-, depending on formulary and coverage selected (see Part D
discussion). As you age, Medigap premiums and Part D Rx premiums will increase.
Medicare Advantage plans with Part D included (MAPD) premiums start at -0- and
go up to the over $100- range depending on your zip code and if the PPO option
2. If your doctors, specialists, and
hospitals, are listed as providers, and your medications are covered in the
formulary on the MAPD or MAPD/PPO plan, Medicare Advantage total premium costs
are going to be much less compared to the costs for a Medigap policy combined
with the costs for a Part D Rx plan. The MAPD premium could be from -0- to the
$100+ range. You would continue to pay the Part B premium with a Medigap or
Medicare Advantage plan.
3. You have a voice. While it is true
political and economic forces will coalesce to control Medicare Advantage plan
costs, the same forces will apply to all of Medicare and U.S. healthcare
inflation. You have a voice and a vote in the political system which regulates
CMS (Centers for Medicare and Medicaid Services) making healthcare funding
decisions. You have more power over a Medicare Advantage plan’s administration
and services because it pays instead of Medicare. A Medigap plan can only respond
to what Medicare pays because it is a private supplemental contract regulated
by the states.
I represent Anthem Blue Cross, and Blue Shield of California Medicare Advantage plans, along with Silverscript (CVS/Caremark) Part D Rx plan.
Click here to get help in selecting a Medicare Advantage, Medigap, or Part D Rx
plan to help meet your financial healthcare security needs.
Rates quoted are estimates. Premiums and
effective dates are determined by the insurance company and the Centers for
Medicare and Medicaid Services (CMS).
Remember to include dental as an
additional feature provided by the insurance company of your choice. Or, click
here for a dental quote.