When enrolling in Medicare, you primarily have two choices: Medicare Advantage (MA) or Original Medicare with a Medicare Supplement (MedSupp) policy. A third option includes retiree plans, often offered by employers, which can resemble either MA or MedSupp plans. This guide will focus on the options available to everyone upon enrolling in Medicare, excluding retiree plans.
Enrollment Prerequisites
To join either Medicare Advantage or a Medicare Supplement policy, you must be enrolled in both Medicare Part A(usually free) and Medicare Part B (which costs $174.70/month in 2024). You cannot be enrolled in both MA and MedSupp simultaneously, though switching between them is possible under certain conditions.
Overview of Medicare Advantage (MA) Plans
A Medicare Advantage Plan is essentially a privatized Medicare plan. Here are key points to understand:
What is a Medicare Advantage Plan?
Medicare Advantage plans are offered by private insurance companies that receive approval and oversight from Medicare. These plans must cover at least what Medicare covers and often include additional benefits such as prescription drugs, dental, vision, and hearing services. Plans vary widely and are designed to meet diverse needs.
Funding and Costs
Medicare pays insurance companies a monthly amount for each person enrolled in their plan, shifting the responsibility of paying medical claims from Medicare to the insurance company. MA plans may have premiums ranging from $0 to a higher amount, depending on the plan.
Plan Structure and Changes
All MA plans have a Maximum Out-of-Pocket (MOOP) limit, capping the total amount you could pay for medical services in a year. Plans can change annually, and members receive an Annual Notice of Change (ANOC) detailing these updates.
Benefits and Documentation
MA plans often include benefits beyond Original Medicare, such as fitness memberships, transportation, and over-the-counter allowances. Each plan provides a Summary of Benefits document, outlining the specific services and costs.
Medical Authorizations and Referrals
Some treatments require pre-authorization from the insurance company, meaning your doctor must get approval before performing certain procedures. Additionally, some plans (typically HMOs) require referrals from a primary care doctor to see a specialist.
Networks
MA plans have provider networks, which can be local, regional, or national. Networks dictate which doctors and hospitals you can use and how much you pay for services. Emergency and urgent care are covered nationwide.
Switching Plans
You can switch from an MA plan to Original Medicare (and potentially a MedSupp policy) during the Annual Enrollment Period (AEP) or the Open Enrollment Period (OEP), among other special circumstances.
Overview of Medicare Supplement (MedSupp) Plans
Medicare Supplement plans, also known as Medigap, help cover costs not paid by Original Medicare.
Plan Basics
MedSupp plans are standardized and cover various out-of-pocket costs associated with Medicare, such as deductibles and co-pays. Common plans include Plan F, Plan G, and Plan N, each offering different levels of coverage.
Costs and Enrollment
You pay a monthly premium for a MedSupp plan. Premiums vary based on location and plan type, and generally increase over time. You can enroll in a MedSupp plan anytime, but if you enroll within six months of starting Part B, you have a guaranteed issue right, meaning you cannot be denied coverage due to pre-existing conditions.
Benefits and Networks
MedSupp plans do not have networks; you can see any doctor that accepts Medicare. They also do not require pre-authorizations or referrals.
Prescription Coverage
MedSupp plans do not include prescription drug coverage, so you would need a separate Medicare Part D plan for medications.
Side-by-Side Comparison
- Cost: MA plans may have lower or no premiums but come with co-pays and MOOP limits. MedSupp plans have higher premiums but cover most out-of-pocket costs.
- Network: MA plans restrict you to network providers; MedSupp plans offer broader provider access.
- Benefits: MA plans may offer additional benefits like dental and vision. MedSupp plans focus on covering out-of-pocket costs.
- Flexibility: MedSupp plans offer more flexibility in choosing providers and do not require authorizations or referrals.
Conclusion
Understanding the differences between Medicare Advantage and Medicare Supplement plans is crucial in making an informed decision. This guide should provide a solid foundation to help you decide which option best meets your healthcare needs. For personalized advice, consulting with a Medicare expert or insurance advisor is recommended.