If you are 65 years old, and have paid at least 10 years of Social Security taxes, you are automatically signed up for Original Medicare (Medicare Part A and B), which takes care of hospital and medical insurance. But you can also enroll in Medical Advantage Plans (Part C). These plans are run by private companies in contract with Medicare, and regulated by the government. They include services comparable to Original Plans, but also include additional benefits like prescription drug coverage.
Below are some points to consider while deciding if Medicare Advantage is the right insurance plan for you:
- You want coverage for vision, dental, assisted living facilities, or nursing home care. Part A and B do not offer these, but some Part C plans do. Make sure you seek specifics before enrolling in one, because offers may vary from state to state, and plan to plan.
- You take prescription drugs. Original Medicare does not cover prescription drugs, unless you pay extra to have a Prescription Drug Plan (Part D) as an add-on plan to your Part A and B. The average monthly cost is about $40, but this can vary from plan to plan. Alternatively, about 82% of all Part C plans cover prescription drugs. So, in some cases your monthly premium may amount to less than what you would pay for Part D as an add-on to Part A and B.
- You do not want to enroll in Medicare Supplement Plans. Medicare Supplement Plans, also private insurance plans, help cover certain deductibles, coinsurance and out-of-pocket costs of Part A and B. Some Advantage Plans might actually be more cost effective than enrolling separately in Supplement Plans. Carefully research the plan if this may be something you are looking for.
- You want an alternative to coinsurance charges by Original Medicare. Original Medicare may charge up to 20% coinsurance charges for most services. Part C may offer a lower or higher coinsurance depending upon the kind of plan you choose. It may charge copays instead, which are fixed costs you pay for services. A trade-off could be a higher monthly premium.
- You want a broad choice in doctors and other medical providers. Part A and B offer a wider range of medical practitioners than private plans. Private plans are restricted to a home network, like an HMO (Health Maintenance Organization). If you are a frequent traveler you may want to remain with Original Medicare.
- You don’t want to pay additional premiums. Advantage Plans typically charge premiums. The recent average was about $30 for an HMO and $32 to $63 for a PPO (Preferred Provider Organization). These premiums don’t include your Part B premium, so you may end up with a significant premium amount if enrolled in Advantage Plans.
- You want flexibility when seeking specialists. Original Plans do not require prior authorization (referral) from a primary care doctor to see a specialist, whereas Advantage Plans can require you to see primary care doctors first. Sometimes PPO plans can let you see a specialist without a referral from a primary care doctor, but that may cost more.
- You are covered by your employer. If your employer-provided coverage serves you well, you may not want to incur additional premiums for Advantage Plans. Your employer may also provide health benefits that supplement Original Medicare. Check with your Human Resources Department, or Social Security Administration for details.
- You qualify for Medicaid or a Medicare Savings Program. These plans for low-income beneficiaries may be better options with regard to costs. You should contact your state Medicaid office for options.
This is not a complete summary of Medicare or Medicare Advantage plans. For more information you can contact us.