Unboxing the Truth About Medicare Advantage Plans

FESCH.TV INFORMIERT:

Are Medicare Advantage plans bad? If you’ve heard that they are, don’t go anywhere. We’re going to unbox the truth about Medicare Advantage plans.

Intro (0:19)
How Medicare Advantage Carriers Afford Low Premiums (1:26)
Giveback Benefit (2:53)
How Provider Networks Work With Medicare Advantage (3:59)
Prior Authorization (4:44)
Maximum Out-Of-Pocket Limit (5:19)
Annual Changes (6:24)

You’ve probably seen a few commercials for Medicare Advantage plans, especially during the fall Annual Enrollment Period. They usually start by asking if you’re happy with your Medicare benefits, telling you Advantage has many more benefits. Some even throw a jab at Medicare Supplement plans, which come with monthly premiums. Others say there’s no premium with an Advantage plan and that they could even return $140 or more to your Social Security check.

When something sounds too good to be true, that’s usually the case. However, the issue is less with the plans and more with the advertisements. The commercials can be extremely misleading and create misconceptions. This is why doing your research is important.

So, how can Medicare Advantage carriers afford to offer such low-premium plans? It helps to understand how the plans work. When you enroll in an Advantage plan, the carrier is paid by Medicare to take on your risk. Because you’re leaving Parts A and B, the private carrier manages your benefits instead of Medicare.

Medicare Advantage carriers also make their money through cost-sharing. Just because you don’t have to pay a monthly premium doesn’t mean the plan is free. You’ll still have to pay out-of-pocket in the form of deductibles, copays, and coinsurance. Advantage plans must provide the same coverage as Parts A and B, but it’s important to be aware that the carrier gets to choose how much of that service to cover and what you’ll need to pay out-of-pocket.

Also, don’t assume you won’t have to pay your Part B premium anymore if you pick up an Advantage plan – this is not true. Regardless of whether your Advantage plan comes with a premium or not, you’ll still need to pay your Part B premium.

This is where the giveback benefit comes into play. Some carriers in some ZIP Codes offer a Part B reduction, reducing the amount you pay for your premium – ranging from a few dollars to the full amount. However, it’s not a reimbursement. Carriers can afford to do this because they get paid by Medicare. Keep in mind that the less you pay in monthly premiums, the more you’ll pay out-of-pocket as you use your benefits. Thus, plans with the giveback benefit involve more cost-sharing. That’s how the carrier recoups their money.

Benefits on an Advantage plan work differently from Original Medicare paired with a Medigap plan. First, Advantage plans come with doctor networks, so it’s important to make sure your doctors are included. Advantage also doesn’t travel with you – restrict coverage to your county. On the other hand, Original Medicare and a Medigap plan travel with you across all 50 states, as most doctors accept Medicare assignment.

When enrolling in an Advantage plan, it’s important to understand prior authorization. Before you receive a service or treatment, the carrier may want to make sure it’s medically necessary. So, you may be required to get prior authorization, which can take weeks. If the carrier doesn’t think it’s medically necessary, your request could face denial. On the other hand, Original Medicare paired with a Medigap plan doesn’t require prior authorization so you won’t be dealing with a wait.

Next, maximum out-of-pocket (MOOP) limits come with Advantage plans. They protect you from paying too much for services. Yet, the amount can be up to $7,500 and resets annually on the first of the year. So, unfortunately, if you’re diagnosed with a serious illness or condition halfway through the year and end up getting close to or even reaching the limit by the end of the year, it will reset to $0 come January 1. Then, you’d have to reach the limit all over again and may be forced to pay it twice within a 12-month period. If this concerns you, you should consider sticking with Original Medicare and enrolling in a Medicare Supplement plan instead.

Last but not least, your premiums, coinsurance, copays, and deductibles are subject to change each year. Thus, out-of-pocket costs aren’t consistent.

Ultimately, Advantage plans aren’t bad. Some supplemental coverage is better than none. Researching your plan options is important and if you understand how the benefits and out-of-pocket costs work, Medicare Advantage can be a good option for you.

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