Medicare Part C plans for 2019 will be released to the public on October 1st.
Medicare Advantage plans, also called Medicare Part C, are private health plans approved by the Centers for Medicare and Medicaid Services (CMS) for people who are enrolled in Medicare. Enrolling in a Medicare Part C plan does not disenroll one from Medicare, but rather opts into having benefits administered by a private health company to save on costs and take advantage of value-added services the private health company may offer.
Medicare Advantage plans (MAs) must provide beneficiaries with coverage equal to or better than the medical and hospital components of Original Medicare and must cover any other medically necessary services. MA plans generally offer other additional benefits that often include coverage for prescription drugs. MA plans that cover prescriptions are called MAPDs. MA plans operate with selected physician and hospital networks, which means beneficiaries must use physicians and hospitals in-network except for emergencies.
Value-added services vary by plan, but may include: dental and vision services, hearing aid assistance, gym memberships, rides to and from medical appointments, weight loss and smoking cessation programs, over-the-counter discounts, and social activities.
Medicare Part C saves money by only operating with selected networks of doctors and hospitals. They are then able to pass savings to beneficiaries, often resulting in costs lower than Original Medicare. However, the expenses associated with MA plans vary by the type of plan chosen. Each MA plan will have different regulations for the services offered and will charge different co-pays. Medicare Part C plans are annual contracts, effective from January 1st to December 31st of each year. Because of this, Medicare Part C plans may change from year to year.
Medicare Part C plan types:
The most commonly offered Medicare Part C plans are HMOs, followed by SNPs. Medicare Part C HMOs operate by having networks of physicians and hospitals that the beneficiary is allowed to go in order to receive care. Receiving care from a non-network provider will not be covered unless it is an emergency. Hospital and physician networks vary by the county of residence of the beneficiary. Medicare Advantage HMOs typically will have a monthly premium, a schedule of co-pays, and a maximum out-of-pocket (MOOP) amount, after which there will be no more co-pays. If a plan includes prescription coverage, the MOOP generally does not include prescription co-pays.
Medicare Part C SNPs are a specialized HMOs designed to cover a beneficiary with a specialized need. Usually, they receive subsidies from either the state of the beneficiary or the federal government and have lower premiums and co-pays than a regular Part C HMO. A beneficiary must have a qualifying condition to be eligible for an SNP. Examples of qualifying conditions are:
SNPs will have specialized coverage for the qualifying condition. Depending on local rules, a qualifying beneficiary might be able to enroll in an SNP at any time during the year instead of having to wait for the enrollment period.
Other Medicare Plan C options (MSAs, HMOPOSs, PFFSs, and PPOs) are less frequent and might not be offered at all in a coverage area. Please go to Medicare.gov for more information on these plans.
Monthly premiums vary and are dependent on the health provider you choose and your county of residence. The costs also vary with what type of Part C plan (HMO, SNP, etc.) you choose. Those with MA plan coverage typically expect to pay a copayment when they visit a physician or a specialist, while those with Original Medicare are responsible for 20% or more co-insurance. Monthly premiums are made to the Part C insurer in addition to the Part B charges to Medicare. Monthly premiums may be deducted directly from a beneficiary’s Social Security, charged monthly to a credit card, withdrawn from checking or savings, or billed monthly. Co-pays are charged at the appointment or may be billed.
Upon enrolling in Medicare Advantage, one should cancel any existing Medigap policy they may have because Medigap only covers co-insurance left by Original Medicare. If someone is covered by Medicare Advantage, they have opted out of Original Medicare for that year, and will not generate co-insurance charges to be covered by an existing Medigap plan. If a beneficiary is changing from Original Medicare to a Medicare Part C plan and has Medigap coverage, that beneficiary must cancel Medigap coverage themselves, preferably in writing. Enrolling in a Part C plan will not automatically cancel Medigap coverage.
Medicare Part C plans offer limited amounts of coverage for skilled nursing or home health care, usually 100 days of coverage. In this, they follow the Original Medicare limit on care for rehabilitation, which is also 100 days. Neither Medicare Part C nor Original Medicare is intended to pay for permanent skilled nursing or home health care. Insurance for extended skilled nursing or home health care is a separate type of insurance called Long Term Care insurance.
To join a Medicare Advantage plan (Part C), you must already be enrolled in both Part A and Part B of Medicare. You may enroll in the initial enrollment period created when you first sign up for your Part B, or during the annual enrollment period, October 15th to December 7th, for an effective date of January 1st of the following year. If you have specific life-changing events, you may qualify for a special election to join outside of the annual enrollment period.
When choosing a Medicare Part C plan, one should start by listing their medical needs that must be addressed by their coverage. Needs to consider are:
Once the plans that meet the needs have been determined, one should examine the cost structure of the plans. Typically, there is a trade-off between monthly premium and co-pay structures. A plan with a higher monthly premium usually has lower co-pays compared to a plan with a lower monthly premium. Depending on the frequency with which a beneficiary receives services, a high monthly premium may be a good trade-off in exchange for lower co-pays, especially on often-utilized services.
Prescription drug coverage, if offered, should be examined carefully. It should be simple to figure out how much prescription co-pays should be if a beneficiary takes a small number of prescriptions. If a beneficiary has more than five prescriptions, they should consult with an insurance agent to assess prescription costs. This prescription cost assessment is usually a free service.
As we wait for the release of the 2019 plan information in October, one can do a lot of work ahead of time to weed out unsuitable plans quickly and spend more time on plans that may be suitable for one’s needs. If you have a special need, want to keep your primary doctor, need to see a certain doctor for treatment, have a favored hospital, or any combination of the above, you already have a good idea of what you want in a plan. If you make an early decision, and subsequently find a better plan, sign up for that plan. During the enrollment period, the most recent application made by the deadline of December 7th is the active plan. However, once that has been determined, that is your plan from January 1st to December 31st. It is very difficult to change plans mid-year. With that in mind, you now have the tools to choose a great Medicare Part C plan for yourself. There is nothing left to do, but to do it!
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