Medicare Advantage Plans & Medicare Supplement Insurance
“What is an MAPD?” “What is a Medi-gap plan?” “What’s the difference between a Medicare advantage plan and a supplement?” are a few questions I frequently hear.
We will go in-depth into each type of two most common Medicare insurances.
Medicare Advantage Plans Explained
A Medicare Advantage Plan, also known as an “MAPD” or a “Part C plan,” is a one type of Medicare-contracted insurance plan. These plans are provided by private companies that have a contract with Medicare to offer you all your Part A and Part B benefits (and sometimes, your Part D benefits) under one plan. If you are signed up for a Medicare Advantage Plan, Medicare services are covered through the plan and are not paid under the Original Medicare.
What does it mean that the Medicare services aren’t paid by Original Medicare? This means that the private insurance company will cover you for your Medicare services instead of Original Medicare. Private insurance companies are required to cover at the very least everything that Original Medicare covers. To be competitive, private insurance companies may offer additional benefits that other plans don’t.
Types of Medicare Advantage Plans
There are different types of Medicare Advantage plans that fit different needs. The various types include:
Health Maintenance Organization (HMO) – This plan offers you access to a set network of hospitals and doctors that coordinate your care, with focus on prevention. This enables you to obtain additional benefits than originally offered with Original Medicare. With an HMO plan, you are required to have a primary care physician (PCP). With a PCP, you will need to see this doctor first to be referred to a specialist.
Health Maintenance Organization with a Point of Service Option (HMO POS) This plan offers a more flexible network permitting you to seek care beyond the original HMO network for certain treatments or under certain situations. An extra fee is needed to use the POS option.
Medicare Special Needs Plans (SNPs) – A special need plan (SNP) has coverage designed specifically for Medicare beneficiaries with certain conditions (such as heart-disease, diabetes, ESRD, etc.) or low-income subsidies. Usually, only people who have certain needs or conditions are allowed to enroll into a special need plan.
Preferred Provider Organization (PPO) – A PPO provides you with the option to use a network of hospitals and doctors that coordinate your care OR to go outside of your network to receive care. The costs to go outside of the network is usually more than using an in-network doctor or hospital.
Medicare Advantage Plan Requirements
In order to qualify for an advantage plan, a person must meet certain conditions. If you wish to sign up for a Medicare Advantage Plan, you must:
- Have both Medicare Part A and Medicare Part B
- Live within the plan’s service area
- Not be diagnosed with End-Stage Renal Disease (unless a specific plan allows it)
How to Choose a Medicare Advantage Plan
It is important to compare the between huge benefits of your present coverage and the Medicare Advantage Plan. Make sure that you understand the extra benefits and that you might lose. Generally, we usually advise people to go through the 3 C’s: cost, convenience, coverage.
In particular, make certain to check out the following:
- Are you open to changing your present doctor(s)?
- In case the prescription drug coverage is provided, are your medications covered? If they are covered, how much is the copay?
- How much is the premium every month?
- How much are the copays and deductible?
- What extra services (also known as ancillary benefits) do they offer? A few examples include dental care, hearing and vision.
- Do you have any upcoming surgeries or treatments?
- Can you work within the network limitations (such as paying extra when you see a doctor who’s out-of-network)?
Medicare Supplements, What Are They Exactly?
A Medicare Supplement also known as “Medi-gap Insurance” is insurance provided by a private health insurance company that is specifically made to supplement original Medicare. It can help pay a few of the health care costs by bridging the “gaps” that aren’t covered by having original Medicare (for example, deductibles and coinsurance). Medicare Supplement policies could also cover certain things that Medicare does not cover. If you have Medicare and you decide to get a supplemental policy, then both plans can pay their share of the Medicare-approved amount for covered healthcare costs.
A supplement policy is not a Medicare Advantage plan (such as an HMO or PPO). You can identify a standardized supplement policies by letters (A, F, L). In Texas or Louisiana for example, you might be able to buy a different type of Medicare Supplement policy called Medicare SELECT. Each kind of letter-labeled supplement policy provides the same basic benefits, no matter the insurer who offers it. Usually the only real difference between policies sold by different insurers is the price. So if you buy a Plan F from ABC 123 Company, Plan F at XYZ 890 Company has the same benefits with the only difference being the cost and the brand of the insurance. Medicare Supplement policies must follow State and Federal laws to protect you.
What Medi-gap Policies Do Not Cover
Medicare Supplement policies don’t cover long term care (such as care in a nursing home), hearing aids, routine eye care, dental care, private-duty nursing and eye glasses. Any new supplement policy has a renewable guarantee. This means the insurance provider cannot cancel your insurance policy as long as you pay the premium. Even though some policies sold in the past covered prescription, no new Medicare Supplement policies are permitted to include prescription drug coverage. For drug coverage with a Medicare supplement, you must purchase a separate prescription drug plan. This is also known as a Part D plan, provided by private companies.
When is the perfect time to buy a Medicare Supplement?
There are different, ideal times to buy a Medicare Supplement.
When you first turn 65, you can buy a supplement policy is during your initial enrollment period. This period is a six month duration and starts on the first day of the month in which you turned age 65 and signed up for Medicare Part B. During this time period, an insurance provider can’t subject you to medical underwriting. This means the insurer can’t refuse to sell you any supplement policy it offers or charge more for a policy because of your health problems make you wait for coverage to start. When you buy a guaranteed issue supplement policy, the insurance provider can’t use an already existing condition waiting period whatsoever.
Please Note: You may send in your application for a Supplement insurance policy before your enrollment period begins. This can be important if you already have coverage that will end when you are age 65. This will permit you to have constant coverage. It is vital to understand your enrollment period. During this time you can purchase any supplement policy the company offers. If you make an application for coverage beyond your open enrollment period, there is absolutely no guarantee that an insurance provider will sell you an insurance plan. At the end of your enrollment period, insurers are permitted to use medical underwriting to choose whether to simply accept your application and exactly how much to ask you for the policy.
Comparing Medicare Supplement costs
The cost of supplement policies may differ widely. There may be big variations in the premiums that different insurance firms charge for a similar coverage. While you shop for an insurance policy, make sure you are comparing the same kind of Supplement policy (i.e. Plan F).