A Medicare Advantage plan is a plan designed by a private insurance company and approved by Medicare. Medicare pays the Medicare Advantage plan a set monthly dollar amount, and in return, the plan will provide your Medicare benefits.
If you choose to buy a Medicare Advantage plan, you will no longer receive your Medicare benefits directly from Medicare, instead, your benefits will be provided through the plan of a private insurance company. Your copay and co-insurance amounts will be set by your Medicare Advantage insurance company. You must continue to pay the monthly premium for Part B while enrolled in a Medicare Advantage plan.
Since these plans are designed and administered by private insurance companies, they are all different. It is very important to pay close attention to all costs, rules, and restrictions before buying a Medicare Advantage plan.
Main Characteristics:
- Plans will set co-payment, and co-insurance amounts for different services. These amounts will be different with each plan.
- Plans are required to set an annual maximum out of pocket limit. M.O.O.P.
- Will usually roll in prescription drug coverage.
Important Considerations:
- Advantage plans generally require you to use doctors and hospitals who have agreed to participate in the plans provider network. The two most common types of provider networks are HMOs and PPOs.
- You can only enroll in, or disenroll from a Medicare Advantage plan at certain times during the year. The first opportunity you will have to enroll in a plan is during your Initial Enrollment Period (IEP). This 7 month period begins 3 months before the month you turn 65, includes your birthday month and runs 3 months after your birthday month. After this, you can usually only make changes to your Medicare Advantage coverage during the Annual Election Period (AEP), which begins on October 15, and runs through December 7 every year. Any changes made take effect in January.
- Annual maximum out of pocket or “M.O.O.P.” amount can be up to $8,300/year for in-network services.
- Medicare Advantage plans can change annually, so it’s important to pay close attention to the annual notice of the change, and updated plan material they send you.
Medicare Advantage plans may be a good fit for those who cannot comfortably afford the monthly premiums for a Medicare Supplement plan.