WHAT IS MEDICARE ADVANTAGE?
In addition to the government’s traditional Medicare program, Medicare offers individuals the option to receive services through a variety of private insurance plans. These private insurance options are part of Medicare Part C and are called Medicare Advantage (MA) plans. MA is a means of receiving health care and Medicare coverage. An individual who joins an MA plan is still in the Medicare program. To participate in Medicare Advantage an individual must specifically opt to receive Medicare coverage through an MA plan. Once this choice is made, the individual must generally receive all of his or her care through the plan’s providers in order to receive Medicare coverage. One of the main goals of MA plans is to manage health care in order to reduce costs while also providing necessary care.
An MA plan must provide enrollees in that plan with coverage of all services that are covered by Medicare Parts A and B, plus additional benefits beyond those covered by Medicare. These additional benefits may be either or both a reduction in the premiums, deductibles and coinsurance payments ordinarily required or healthcare services not covered by traditional Medicare such as dental and vision care or certain preventive services. Many MA plans also include Part D prescription drug coverage. These plans are known as Medicare Advantage Prescription Drug plans or MA-PDs.
MA plans differ with respect to what benefits they provide, out-of-pocket costs such as premiums, deductibles, and co-pays, and whether they provide prescription drug coverage. It is important to remember that if you are happy with your Medicare benefits, whether you are in traditional Medicare or an MA plan, you don’t HAVE to change when the opportunity arises. In addition, those with coverage through their current or former employer should check to see how any changes might affect such coverage.
KEY DIFFERENCES BETWEEN TRADITIONAL MEDICARE AND MEDICARE ADVANTAGE
Benefit Structure: Medicare has 4 “parts:” Part A, Part B, Part C and Part D.
Traditional Medicare is administered and run by the federal government. Traditional Medicare includes both Part A which covers hospital care and Part B which covers medical insurance.
Part D is part of the Medicare program that provides outpatient prescription drug coverage. Part D is provided through private insurance companies that have contracts with the government. If you have traditional Medicare and want Part D coverage you must purchase it separately.
Part C is an alternative to traditional Medicare that allows private health insurance companies to provide Medicare benefits. The private health plans are known as Medicare Advantage plans and are regulated and reimbursed by the federal government. MA plans combine Part A and Part B and oftentimes Part D, into one plan so your entire package of benefits comes from a private insurance company.
There are also Medigap plans which are private health insurance plans that help pay for the “gaps” in coverage left by traditional Medicare such as copayments, coinsurance, and deductibles. Typically, someone with traditional Medicare must purchase a separate Part D drug plan as well as a Medigap plan to supplement their traditional Medicare benefits. Medigap policies do not work with MA plans and it is illegal for anyone to sell an MA enrollee a Medigap policy unless they are switching back to traditional Medicare.
Enrollment: When you enroll in Medicare for the first time you are automatically in traditional Medicare. You must specifically opt to receive your Medicare coverage through an MA plan; it does not happen without your authorization. Note that some former employers offer their retirees coverage through MA plans, so in order for such retirees to retain added benefits through their former employers, they must enroll in an MA plan affiliated with their retiree coverage.
Access to Services: Traditional Medicare does not have a “network.” Enrollees in traditional Medicare can access any Medicare-approved doctor, hospital, or provider. Medicare Advantage enrollees may be limited to a network of specific providers.
Cost: In traditional Medicare, Part A is free if you (or in many cases, a spouse) have worked and paid Social Security taxes for at least 40 calendar quarters (10 years). Those in traditional Medicare pay a monthly premium for Part B coverage. Those in traditional Medicare may also have to pay for deductibles, coinsurance and copays. With traditional Medicare, Part D drug coverage and a Medigap plan may have to be purchased separately. Traditional Medicare has no out-of-pocket maximum.
For those enrolled in a Medicare Advantage plan costs will vary. Enrollees must pay the same monthly premium as those enrolled in traditional Medicare Part B, unless the MA plan, as an extra benefit, pays for some of your Part B premium. An enrollee may also have to pay a monthly premium to the MA plan, copays and coinsurance. Each MA plan has an annual limit on out-of-pocket costs. Many MA plans have prescription drug coverage built in to the benefit package.
Benefits: Traditional Medicare has a standard benefit package that covers only medically necessary health care services. MA plans must offer a benefit “package” that is at least equal to traditional Medicare’s and covers everything Medicare covers (except hospice care). Some MA plans may cover services which are not covered by traditional Medicare such as dental, hearing and vision coverage and health club memberships.
Appealing Denied Claims: Regardless of how you receive your Medicare benefits you always have the right to appeal unfavorable decisions regarding coverage of your services. However, timeframes and deadlines differ depending on whether you have traditional Medicare or a Medicare Advantage plan.
- Additional Information: https://www.medicareadvocacy.org/medicare-info/medicare-coverage-appeals/#Part%20C (site visited September 23, 2015)
MEDICARE ADVANTAGE ENROLLMENT PERIODS
Most individuals are only permitted to join or leave an MA plan at certain times during the year. This is referred to as the “lock-in” rule. There are several election periods during which an enrollment request can be made.
- The Initial Coverage Election Period (ICEP), the period during which a newly MA eligible individual may make their initial choice to enroll in an MA plan. This period begins three months immediately before the individual’s first entitlement to both Medicare Part A and Part B and ends on the later of either the last day of the month preceding entitlement to both Part A and Part B, or, the last day of the individual’s Part B initial enrollment period.
- During the Annual Coordinated Election Period (ACEP) all MA eligible individuals may elect among all available options, whether traditional Medicare, MA plans, MA-PD plans, or Prescription Drug Plans (PDPs). The ACEP occurs from October 15 through December 7 of every year; coverage begins on the first day of the following calendar year. The Annual Enrollment Period for Part D mirrors that of the ACEP for MA.
- Open Enrollment Period for Institutionalized Individuals (OEPI): MA eligible individuals, who move into, reside in, or move out of a nursing home or other institution, as defined by the Centers for Medicare & Medicaid Services (CMS), can make an unlimited number of MA elections.
- The Medicare Advantage Disenrollment Period (MADP) gives an MA plan enrollee the opportunity to disenroll from any MA plan and return to traditional Medicare between January 1 and February 14 of every year. Disenrollment is effective the first of the following month. The MADP does not provide an opportunity to join or switch MA plans, but it does allow someone leaving an MA plan to pick up Part D prescription drug coverage.
- During a Special Enrollment Period (SEP) an individual may elect a plan or change their current plan election. There are many different SEPs, including: for individuals whose current plan terminates, violates a provision of its contract, or misrepresents the plan’s provisions; individuals who change residence; and individuals who meet “exceptional circumstances” as the Medicare program may provide. NOTE: CMS has designated an SEP for those individuals who are eligible for Medicare and full Medicaid (dual eligibles) and for those eligible for “Medicare Savings Programs.” These individuals can make an MA change or return to traditional Medicare on a monthly basis.
MA eligible individuals who elect an MA plan during the initial enrollment period surrounding their 65th birthday have an SEP, known as SEP65. SEP65 allows the individual to disenroll from an MA plan and elect traditional Medicare any time during the 12-month period that begins on the effective date of coverage in the MA plan.
There is also an SEP to allow Medicare beneficiaries eligible for an MA plan to enroll in a 5-star MA plan at any point during the year.
HOW TO JOIN A MEDICARE ADVANTAGE PLAN
To enroll in an MA plan, an individual must complete and sign an election form or complete another CMS approved election method offered by the MA organization. Individuals can contact their plan choice directly or call 1-800-MEDICARE to enroll. At a minimum, MA organizations must have a paper enrollment form process available for potential enrollees.
HOW AND WHEN TO DISENROLL FROM A MEDICARE ADVANTAGE PLAN
An individual may only disenroll from an MA plan during one of the election periods. A beneficiary may disenroll by enrolling in another plan, giving or faxing a signed written notice to the MA organization, by submitting a request via the Internet to the MA organization, or by calling 1-800-MEDICARE. Generally, the date coverage ends will be the first day of the month after an individual requests disenrollment. Retroactive disenrollment may be granted by CMS if there never was a legally valid enrollment, or a valid request for disenrollment was properly made but not processed or acted upon.
WHAT OPTIONS ARE AVAILABLE UNDER MEDICARE ADVANTAGE?
- Coordinated Care Plans:
- Health Maintenance Organizations (HMOs)
- Provider Sponsored Organizations (PSOs)
- Preferred Provider Organizations (PPOs)
- Medical Savings Accounts (MSAs) combine the use of a health care savings account with a high deductible catastrophic health plan.
- Private Fee-For-Service Plans (PFFSs) – depending on where such plans are offered, they either have to contract with a network of providers, like coordinated care plans, or allow an individual to use any doctor or hospital as long as that provider accepts the plan’s terms and conditions.
- Special Needs MA Plans (SNPs) designed for people who live in certain institutions, are eligible for both Medicare and Medicaid, or have one or more specific chronic or disabling conditions. A SNP is a type of coordinated care plan.
WHO’S ELIGIBLE FOR MEDICARE ADVANTAGE?
An individual entitled to benefits under Part A and enrolled in Part B is eligible for an MA plan. An individual is eligible to enroll in a particular MA plan if the plan serves the geographic area in which the individual resides. An MA plan may not deny enrollment to an eligible individual based upon health status or certain other factors. However, individuals with end-stage renal disease (ESRD) are generally excluded, with a few exceptions, including when an individual who develops ESRD while enrolled in an MA plan may continue to be enrolled in that plan. Such an individual may also enroll in another MA plan if the individual’s original plan terminates its contract with CMS or reduces its service area. An individual with ESRD may, however, elect an MA special needs plan as long as that plan has opted to enroll ESRD individuals. There are also circumstances where an MA organization may accept enrollees with ESRD who are enrolling in an MA plan through an employer or union group.
WHAT YOU PAY
Out-of-pocket costs in an MA plan depend on whether the plan charges a monthly premium, whether the plan has a yearly deductible, how much you pay for each visit or service (copayments or coinsurance), the type of health care services needed and how often and whether network providers are used. MA plans may charge cost-sharing for a service that is above or below the traditional Medicare cost-sharing for that service. However, MA plans cannot impose cost-sharing for chemotherapy administration services, renal dialysis services, and skilled nursing care services that exceed the cost-sharing for those services under traditional Medicare.
All MA plans must have a maximum allowable out-of-pocket (MOOP) limit on the amount of cost-sharing they can charge for all Part A and Part B services, with the amount to be set by CMS on a yearly basis.
WHAT TO KNOW BEFORE JOINING A MEDICARE ADVANTAGE PLAN
- MA plans can decide each year whether to offer an MA plan and may discontinue the plan after providing their enrollees with notice. MA plans can also change benefits, premiums, copays and their provider network from year to year.
- Many plans require enrollees to obtain the prior approval of their primary care physician in order to see a specialist.
- In most plans, enrollees are usually not free to go to any physician or hospital they choose. Enrollees must use the plan’s providers and facilities. In other plans, enrollees must pay more to see “non-network” providers.
- Plans only cover emergency and urgent care if an enrollee is out of the service area for a brief time, but an enrollee must return to the area for follow up or routine care.
- There may be limited locations where enrollees can receive care.
- It can take up to 30 days to disenroll, and an enrollee must continue to use the MA plan during this time.
CONSIDERATIONS FOR SELECTING A MEDICARE ADVANTAGE PLAN
- Compare the coverage and costs available through the traditional Medicare program combined with an appropriate Medigap policy, versus the available MA plans.
- Inquire as to whether and to what extent you are required to receive services from medical providers who participate in the MA plan you are considering.
- Read each plan’s literature to see what kind of plan it is and what it pays for.
- Does the plan include Part D prescription drug coverage? If not, do you want to join a separate Part D plan?
- Determine what plan services are provided at additional cost. All preventive services should be identified, as well as any limitations associated with visits or services. Determine where to go for emergency, urgently needed, and regular care.
- Check into the plan’s physicians to determine if your physicians are in the plan and find out how to change physicians if a satisfactory relationship with a plan physician cannot be established. In addition, ask which hospitals, skilled nursing facilities and home care agencies the plan contracts with to ensure that there are satisfactory choices.
- Learn how to use the plan’s complaint system and how appeals and grievances are handled.
- Ask a plan representative if member satisfaction surveys are conducted and if the results are available for review.
- Contact the CMS Regional Office to determine if a plan has failed to comply with CMS regulations.
- Individuals can obtain help and a list of MA plans in their area from their State Health Insurance Assistance Program (SHIP), the Medicare Hotline (1-800-633-4227), or the Medicare website (www.medicare.gov). When clicking on the SHIP link, enter your state of residency and select “SHIP.”