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What Is Medicare Advantage (Part C)?

Published November 8, 2022

Medicare Advantage plans are managed care plans, and “replace” the services provided through Original Medicare. This means that a Medicare Advantage plan is required to provide all of the services provided by Original Medicare, but the cost to the member (you) can differ from the Original Medicare cost-sharing requirement. In most locations throughout the United States, there are a wide variety of plans, offered by many carriers.

Medicare Advantage plans are very popular amongst beneficiaries. It is commonly believed that over 50% of these 63 million Medicare beneficiaries will be enrolled in a Medicare Advantage plan by 2024, whether that be a retiree group plan — which is usually a specially-tailored, large group Medicare Advantage — or an individually-purchased Medicare Advantage plan.

There are many things that you must consider and understand prior to selecting a Medicare Advantage plan so that you can receive the benefits that you expect, access to the healthcare services that you require, and costs that meet your expectations.

Who Offers Medicare Advantage?

Medicare Advantage plans are offered by managed care organizations, usually an insurance company. The insurance company manages every aspect of coverage. The costs of healthcare services and prescriptions — if your Medicare Advantage plan includes prescription drug benefits — are solely determined by the Medicare Advantage carrier, and must be approved annually by the Center for Medicare and Medicaid Services (CMS).

What does Medicare Advantage Cover?

Medicare Advantage plans, also known as Medicare Part C, combine Medicare Part A and Part B services, and in many cases also include prescription drug benefits.

All Medicare Advantages plans are required to provide all the services provided under Original Medicare (Part A & Part B). This includes, but is not limited to:

  • Inpatient hospitalization
  • Outpatient hospitalization
  • Skilled nursing facility care (not custodial care)
  • Physician office visits
  • Diagnostic testing
  • Durable medical equipment

The Medicare Advantage carrier has the right to approve all services, and if you disagree with the result of the approval process, you have the right to appeal this decision, with multiple levels, if denied.

Medicare Advantage Plans Renew Every Year

Medicare Advantage plans renew annually and run from January 1st through December 31st. Each year, every detail is subject to change. While this can be a source of stress, this is not necessarily negative, because improvements in coverage can result in enhanced benefits for members.

A frequently asked question is whether or not you can change between Medicare Advantage and Medigap. Medicare Advantage plans allow you to switch annually between Medicare Advantage plans, but if you attempt to switch from a Medicare Advantage plan to a Medicare Supplement plan, also known as Medigap, you may be subject to restrictions such as medical underwriting. Medical underwriting will assess your health to determine your plan eligibility. In some cases, special circumstances may override underwriting, such as where you live. Nonetheless, it is important to be mindful of this when considering switching plans.

Medicare Advantage Eligibility

You must be enrolled in Medicare Part A and Part B in order to become a Medicare Advantage member. You are required to be a permanent resident in the location you’re applying for in order to enroll in a specific Medicare Advantage plan. It is an important nuance to understand that even if the “name” of the Medicare Advantage plan is the same, the actual terms and conditions (deductible, copays, out-of-pocket maximum) can be different, depending on your residence. If you move out of your Medicare Advantage Plan’s service area, you are required to change your Medicare Advantage plan (or Part D plan). The same is not true for Medigap.

There are many types of Medicare Advantage plans, so it’s important to become familiar with the language. The coverage, the terms and conditions, your access to healthcare providers, and your cost-sharing responsibilities will vary among Medicare Advantage plans. As stated earlier, each detail can change every calendar year.

Medicare Advantage Enrollment

When becoming eligible for Medicare Part A, you are eligible to enroll in both Part B and a Medicare Advantage plan. You can change your Medicare Advantage plan annually during the Annual Election Period, which runs from October 15th, through December 7th, every year.

In addition, Medicare Advantage members can also change among Medicare Advantage plans once between January 1st and March 31st — but must be an existing Medicare Advantage member in order to switch during the Medicare Advantage during these dates. Additionally, you can:

  • Cancel your existing Medicare Advantage plan
  • Return to Original Medicare (Parts A and B)
  • Purchase a standalone prescription drug plan (Part D) if you return to Original Medicare.

The caveat is that acceptance into Medigap during this period is not guaranteed, unless you are eligible for another reason as determined by federal or state-specific Medigap issuance rules.

Medicare Advantage Coverage Requirements

Medicare Advantage plans offer coverage that must be, on average, as good or better than services provided by Original Medicare. It is important to note that your financial responsibility can be different from Original Medicare, for a specific service that you receive.

Most plans include prescription drug coverage (Medicare Advantage Drug Plan, or MAPD). If you qualify for Medicare Part A, then you are required to have continuous prescription drug coverage (no discontinuation for any period longer than 63 days). If you have other prescription drug coverage that qualifies as “creditable coverage,” then you can elect any Medicare Advantage Plan, whether or not that plan includes prescription drug benefits.

Types of Plans

In most locations throughout the United States, there are dozens of Medicare Advantage plans available to Medicare beneficiaries. The complicated thing about understanding Medicare advantage is that while the language may look familiar to you because of your experience with individually-purchased health insurance or employer-sponsored health insurance, Medicare Advantage plans can work differently. As you consider the types of Medicare Advantage plans, remember that even the definition of ‘network’ can vary among HMO plans.

HMO (Health Maintenance Organizations). In some instances, you may need to have an in-network primary care physician, or you could be responsible for all out-of-pocket costs incurred. As stated earlier, even this requirement can be waived under Medicare (very unlikely in the individual, under-65 health insurance market).

If you receive healthcare services from an out-of-network provider, you may be responsible for the entire cost of the healthcare services that you receive unless it is an emergency. There can be differences because a type of HMO may allow you to receive healthcare services from out-of-network providers. You will need to refer to your individual Medicare Advantage plan terms and conditions in order to determine when this is or is not the case.

PPO (Preferred Provider Organization). In this instance, no referrals are required. Furthermore, any healthcare provider will accept a PPO if it accepts a federally-issued Medicare card. You are likely to be charged a higher amount in the form of co-insurance or copay, but you will be covered under a Medicare Advantage PPO.

OpenMedicare Is Here to Help

Medicare Advantage is one possible approach to address out-of-pocket healthcare costs for the Medicare-eligible population. Another is Medigap, otherwise known as Medicare Supplement, or Medicare Supplemental policies. For more information, you can reach out to a licensed partner by calling us at (844) 910-2061 or visit our website to find the right Medicare plan.

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