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 e
Have you heard Medicare Advantage plans are bad? If so don't go anywhere. In today's video, we're going to unbox the truth about Medicare Advantage plans. Hi, my name is Lindsay Engle. I'm the Medicare expert for Elite Insurance Partners in MedicareFAQ.com. You've probably seen a dozen different commercials for Medicare Advantage plans, especially around the Annual Enrollment Period, every October. They usually start with asking if you're happy with your Medicare benefits? Next, they'll tell you there's tons of additional benefits available to you, such as dental, vision, and hearing coverage. Some commercials will even throw a jab at paying a monthly premium for Medicare Supplement Plan. Followed with, telling you that Medicare Advantage plans come with a $0 premium and could possibly give you back up to$140 or more in your social security check. When something sounds too good to be true. That's usually the case. Before we jump into the nitty-gritty about Medicare Advantage plans. I want to say that no, Medicare Advantage plans are not bad, it's good to have a few different options on supplemental Medicare coverage. The issue is these commercials can be extremely misleading and create a misconception. They convince you to jump ship and make a switch to your coverage before you actually thoroughly do your research. In this video, our goal is to make sure you understand how all these plans work, so that you can make an educated decision on your health care coverage. Let's start with how these Medicare Advantage carriers can afford to offer you low or even $0 premium plans. The carrier's pull you in by telling you that they have a plan that will cost you $0 in monthly premiums or just a few dollars. This is because when you enroll in a Medicare Advantage plan, that carrier will be paid by Medicare to take on your risk. That's the first way Medicare Advantage carriers make their money. Because they get paid directly from Medicare when you enroll in their plan. When you enroll in a Medicare Advantage plan, also known as Part C, you're actually leaving original Medicare Parts A and B. You're choosing to go with a private carrier instead to manage your Medicare benefits. Another way Medicare Advantage carriers make their money is through cost-sharing. Advantage plans are pay-as-you-go. Meaning, as you use the benefits, you'll pay out-of-pocket in the form of deductibles, co-pays, and coinsurance. Yes, the Medicare Advantage plan must cover the same services as Original Medicare. But, here's the kicker. The carrier gets to choose how much of that service they will cover and how much you will pay out-of-pocket for that service. Many beneficiaries assume that if they enroll in a Medicare Advantage plan, they don't have to pay their monthly Part B premium. This is simply not true. Regardless, if your Medicare Advantage premium is $30 or $0 a month, you still have to pay the additional premium for Part B. This is where the giveback benefit comes into play. You may have recently seen some commercials for this benefit. How this benefit works is that some carriers in some zip codes, offer a Part B reduction. This means that they reduce the amount you pay in your Part B premium anywhere between just a few dollars to the full standard Part B amount, so that less is taken out of your Social Security check each month. Now this is not a reimbursement. This is a reduction in your Part B premium. So, how can these carriers afford to give you a reduction your Part B premium? Don't forget the carriers are being paid by Medicare every month to take on your risk. In addition, the less you pay in a monthly premium for your Part B and a Medicare Advantage plan, the more you're going to pay out-of-pocket as you use those benefits. So if you're paying a reduced amount for your Part B premium, your plan will have higher cost sharing. That's how the carrier recoups their money. Now that weve gone over how Medicare Advantage carriers make money, let's go over how the benefits work in comparison to Original Medicare and a Medicare Supplement Plan. First, let's go over how provider networks work with a Medicare Advantage plan. Unlike Original Medicare and Medicare supplement plans, Medicare Advantage plans come with Dr. Networks. These networks can be limited to a single county, a few counties, or even statewide. It's important to double check that all of your providers are within the plans Network before enrolling. It's also important to note that Medicare Advantage plans do not travel with you. So, if you leave your plan service Area and go to a different state or even over to a different county, you'll have to pay the out-of-network cost for any medical services received. When you have Original Medicare and a Medicare Supplement Plan, your coverage will travel with you across all 50 states. Next, we'll go over prior authorization. Before service is provided, your Medicare Advantage carrier may want to make sure that your service or treatment is considered medically necessary. In order to do this, the carrier may require you to get prior authorization before you receive any services or treatment. These requests can take a few weeks before they're approved. In addition, the request could be denied If the carrier doesn't think the service or treatment is medically necessary. To avoid any prior authorizations altogether, you can opt to stick with Original Medicare and enroll in a Medicare Supplement Plan instead. Next, we'll go over maximum out-of-pocket limits. Medicare Advantage plans come with a maximum out-of-pocket limit. This limit is to protect you, the beneficiary, from paying a high dollar amount out-of-pocket for services received under Part A and Part B. The caveat is that the carrier's can set this limit to be pretty high. It can be up to $7,500 or more. This can easily put a dent in your rainy day fund or retirement savings if you're on a fixed income. The other downfall is that these limits will reset annually on January 1st. So, if you're diagnosed with a serious illness or condition halfway through the year, and end up getting close or reaching that maximum out-of-pocket limit in December, come January 1st, that limit will be reset. What this means is that if you're still receiving treatment, you'll have to reach that maximum out-of-pocket limit all over again. This could force you to pay it out-of-pocket twice within a 12-month period. If this is something that concerns you, then you should consider sticking with Original Medicare and enrolling in Medicare Supplement Plan instead. Last but not least, we'll go over annual changes. Medicare Advantage plans will change their premiums, coinsurance, co-pays, deductibles, and benefits each year. This means that year-over-year, your out-of-pocket cost and your benefits can change. You'll receive an annual notice of change letter in the mail each September. This letter will tell you what's changing with your plan that will become effective on January 1st. If you're unhappy with a changes that will take effect on January 1st, then you can take advantage of the Annual Election Period that comes around every October. During this time, you can choose to leave your Medicare Advantage plan and switch to another one or go back to original Medicare and enroll in a Medicare supplement. If you would like to avoid having annual changes and needing to review your plan and benefits year-over-year, then consider sticking with Original Medicare and a Medigap plan. Medicare Supplement plan benefits do not change annually. So now that we've unboxed the truth about Medicare Advantage plans, are they bad? No, Medicare Advantage plans are not bad. It's better to have some supplemental Medicare coverage than none at all. As long as you understand how your Medicare Advantage benefits and out-of-pocket cost of work, it could be a good option for you. Just make sure to do your research on all your supplemental Medicare options, including both Medicare Advantage, or Medicare supplements also known as Medigap before you choose which one to enroll in. I hope you found this video helpful. If you did, don't forget to subscribe to our YouTube channel. Make sure notifications are turned on, so that you're notified each time we upload a new video. We also have a great Medicare community on Facebook. Well include a link in the description below so that you can join. Until next time. Bye.