Is Medicare Advantage Right For You?

Medicare’s Annual Enrollment Period (AEP) starts today.  For the next 6 weeks any Medicare beneficiary can make changes to your Medicare Advantage or Medicare D (Prescription Drug Plan) for 2013.

It is only natural that people ask questions before they switch.  Here are a few that I have been asked.

Medicare Advantage is different from Medicare Supplemental insurance (Medigap.)  Unless you purchase Medigap during a guaranteed issue period, you will be subject to medical underwriting and a possible decline or pre-existing condition clause.  During that time, even if your application for Medigap is accepted, you will not be covered for anything that is declared a “pre-existing condition” for 6 months.

If you elect to enroll in Medicare Advantage for 2013 there is no “pre-existing condition” clause.  You will be able to use your Medicare Advantage plan on January 1, 2013 regardless of your health.

Last week one of my clients asked me if he could still get a Medicare Advantage plan.  He has been in the hospital twice in the last year.  He has diabetes and a bad valve in his heart.  He cannot qualify for Medigap for health reasons.  However, he can enroll in Medicare Advantage during Medicare’s Annual Enrollment Period.

Earlier this week one of my clients thought that since Medigap plans were consistent Advantage plans would be the same from one company to the next.  That is only logical and would make sense.

The Centers for Medicare and Medicaid Services (CMS) has approved 10 standardized Medigap plans.  Plan N with ABC insurance company is identical to Plan N with XYZ insurance company.  The only difference is the logo that is on your ID card.

Medicare Advantage is regulated by the same governmental body but it is different.  CMS allows each insurance company to add benefits to their plans as long as they provide the same minimum level of coverage as Original Medicare (without Medigap or Medicare D supplements.)

The answer to this question is a loud NO!  Provided you take your time to understand how your plan works, Advantage plans can save you a great deal of money in premium.

However, if you do not learn how your Advantage plan works or prefer to pay more to have less aggravation at your doctor’s office, Advantage can be a real pain.

The bottom line is that if you are considering signing up for an Advantage plan, take the time to make certain that you understand how it will pay, what medical providers you can use and what ones to avoid.

If you require serious medical attention later next year, you do not want to be stuck wondering if your insurance plan is going to pay.  You need to concentrate on getting better and not worrying about money.

The answer is yes and no.  If you decide to return to Original Medicare within 12 months of leaving Medigap, you are able to exercise your “Trial Right.”  It allows you to experiment with Medicare Advantage one time during your life.  If you return to Original Medicare within 12 months, Medigap approval is guaranteed, provided you apply for Medigap within 63 days of disenrolling from Medicare Advantage.

If you have had Medicare Advantage for longer than 12 months and elect to return to Original Medicare, you are guaranteed to be able to get a Medicare D plan for your prescriptions.  However, you must medically qualify for Medigap.  There is no Special Election Period that guarantees that you can return to Medigap after you have been on the Medicare Advantage system for longer than 12 months.

For more information about switching to Medigap from Medicare Advantage, read, “Changing From Advantage To Medigap.”

I understand why someone would ask this question.  Like many Americans I have been fooled by some of the propaganda that has circulated for political reasons.

I wondered why larger insurance companies have been buying up smaller Medicare Advantage companies when everything that I read prophesies the end of Medicare Advantage.  A couple of weeks ago I read the PPACA again.

Only the bottom 40% of Medicare Advantage plans will be penalized by Obamacare.  When you enroll in a Medicare Advantage plan, somewhere in the materials you receive will be a rating for your plan.  One and two star plans will only get what Medicare normally pays per person to pay for their health care.  Plans with a 3 star rating will get the normal payment plus a bones of 2% of the average national Medicare payment per person for each enrollee.  Plans with a rating of 4 stars or better will get a 4% bonus.

Insurance companies are buying Medicare Advantage companies while betting they are able to turn them into 3-star or better plans by 2014.

This is a very hard question to answer.  Although many people assume that the two types of plans are similar, they are really quite different.

There are 10 different Medigap plans.  Each of them pay a different amount of your health care bill.  The most popular plan is Plan F.  As long as you do not use a medical provider who has opted out of the Medicare system, it will pay for everything other than your prescriptions.

One of the more recent plans is called, “Plan N.”  It is among the least expensive Medigap plans available.  However, it requires that you pay both your Medicare B deductible and a $20 co-payment every time you receive health care that qualifies for Medicare B.

Medicare Advantage plans normally require you to pay a nominal co-pay for all your health care expenses until you have paid a “Maximum Out-of-Pocket.”

Without knowing which Medigap plan you want to compare to which Medicare Advantage plan, it is impossible to answer this question.  You might as well ask, “Which is better, chocolate or strawberry ice-cream?”

Not necessarily.   I have not asked doctors about their incomes.  I was taught that it is rude to ask someone else how much they got paid.

I don’t know if they get paid less but I do know that how they get paid is different.  With Original Medicare, doctors get paid based on Medicare’s payment formula.  Doctors who are in an Advantage plan’s “network” of approved providers have signed a contract to put a cap on the amount they can charge for health care treatment.  That cap may be higher or lower than what Original Medicare would pay for the same treatment.

Yes!  Not all doctors and hospitals accept Medicare Advantage.    Those that do are not required to accept every Medicare Advantage plan.  Before you enroll in a Medicare Advantage plan you need to look at something more than the premium.  At the very least you need to make certain that your preferred doctors and hospital are within the Advantage plan’s network.

The same is true for Original Medicare.  Not all doctors will accept Medicare’s approved amount as payment in full for their services.  Those that do not are allowed to charge as much as 15% more than the Medicare approved amount.  Unless you have a Medigap plan that will pay what Medicare does not, you are liable for the difference.

About 2% of doctors and hospitals have “opted out” of the Medicare system.  That means that their patients cannot make a claim with Medicare.  If you elect to use one of these medical providers, they are free to charge whatever they feel their service is worth.  You are liable for the full amount.