Medicare Advantage

Medicare Part C is also called Medicare Advantage. Part C combines Medicare with traditional health care insurance. Medicare Part C is run by an insurance company and has the feel of an insurance company rather than a government program. Let’s go into the specifics of Medicare Advantage.

Types of Advantage Plans. There are two ways an Advantage Plan provides you health insurance. Either through a managed care plan or a fee-for-service plan. 

Managed care plans. This type of Advantage Plan offers you a trade-off. Your gaps in Medicare coverage will be filled, however, you will have to pay a premium and you will be restricted by what doctors you can see and what treatments they can provide. Oftentimes the premium is low (or there may be no premium at all) but you will again be restricted by the plans network.

Network. A managed care plan will keep a list of doctors, specialists, hospitals, and other facilities. This list is their network and every player in the network has agreed to the insurance company’s rules. A danger of managed care is that you can start out in a network that has all the right doctors and facilities close to your home but due to changes in fee schedules (i.e. the company becomes stingy, doctors leave, etc) you could end up with a network full of doctors you don’t like.

Referrals. Once you enroll in the managed care Advantage Plan, you will be assigned a primary care physician (PCP). This can be a pain since you will have to see him initially for all medical issues and he must sign-off on any and all referrals to specialists or other doctors even if they are in your network. PCPs tend to be paid less and so this restriction cuts cost because it lets the PCP handle most problems but also the extra hassle of getting referrals prevent patients from getting specialist care. Most seniors, however, require specialist care more often and may reject the HMO plan for a Medigap plan or fee-for-service that allows them greater flexibility in choosing the doctors they want.

Point of Service Option (POS). A more expensive, yet more attractive, managed care option is the POS. This option allows out-of-network consultations and abolishes the PCP requirement. But again, this will be more expensive. The patient will have to pay a higher co-pay and will be required to pay more in their monthly premiums.

Fee-for-service plans. This type of Advantage Plan does not restrict what doctors you can see, as long as they are Medicare participating doctors. The catch is that these doctors have to accept the Advantage Plans fee and the other treatment restrictions included in your plan. If the doctor doesn’t, you’ll be personally responsible for the entire fee. Though a fee-for-service plan offers more freedom it can end up being more restrictive due to its payment limitations to doctors.

Some fee-for-service plans may not even fill the coverage gaps in Original Medicare. There could also be a lack of predictable care. The doctor must accept the fees for each service as dictated by the insurance company. Just because the doctor accepts such fees for one service does not mean he will accept it for the next, different type of treatment. This could place you in a scenario where you’re, for example, covered for a doctor’s visit, but won’t be able to get an MRI or other important test. 

What to look for in Advantage Plans. There are numerous pitfalls for the unwary when choosing a Part C, Medicare Advantage Plan, so it’s important for you to understand what is being covered. The best way to do this is to ask the plan representative for a printed pamphlet usually called a Summary of Benefits. The key factors to consider are the networks of doctors, whether you will have access to the specialists you need (e.g. cardiologists for heart problems), the type of preventative care services available, how stringent referrals are, and so on. Make sure you have a firm grasp of what costs and fees you’ll be responsible for so you won’t be swamped in medical bills.

Advantage v. Medigap. The most important difference between Medigap and Medicare Advantage is cost. Medigap plans (dependent on which of Plan A through N it is) can cost upwards of $500 plus. On the other hand, Advantage Plans could have extensive restrictions, including geography restrictions. Medigaps are accepted anywhere Medicare is and covers whatever Medicare covers. Managed care plans could deny coverage if treatment is outside of your plan. Seniors requiring extensive specialist care with the cash to burn may want to chose the freedom of a Medigap.

Depending on your needs and income, you can chose the Advantage Plan which has a lower premium but higher restrictions or the Medigap plan which costs more but has greater freedom.