When you become eligible for Medicare, you face a series of choices. One of the first choices involves the type of coverage you prefer.
Medicare Part A and B comprises of what is known as Original Medicare. But if you would prefer to enroll in a plan managed by a private health insurance company, you can choose Medicare Part C, or Medicare Advantage.
You must be enrolled in both Medicare Part A and Part B in order to elect a Medicare Advantage Plan. You will also have to continue paying your Part B premium. Medicare will then pay the Medicare Advantage plan administrator a set monthly amount to manage your care, and your Medicare Advantage plan will deliver all of your benefits. You also must live within the Medicare Advantage plans service area.
The Difference Between Original Medicare and Medicare Advantage
Much of the difference between the two plans involves the way in which you access your benefits.
With Original Medicare, you are subject to deductibles and a 20 percent co-insurance on Part B. You can access care at any doctor’s office or hospital that accepts Medicare.
Under Medicare Advantage plans you access care through a network of providers in your coverage area. You will be responsible for co-pays depending on the type of services. Some plans will charge a per-day co-pay for hospital stays, while others charge a flat amount for the entire day.
Medicare Advantage plans tend to change more each year, with regard to coverage. However, beneficiaries have the opportunity to review their plans each year, and choose one that best suits their anticipated needs for the upcoming year.
The Benefit of Having a Medicare Advantage plan
Before Medicare Advantage was created, those with Original Medicare who could not afford Medigap plan sometimes found themselves swamped in medical expenses when a serious illness or other incident occurred.
Medicare Advantage plans were created to provide a sort of safely net for catastrophic expenses. The plans include an out-of-pocket spending cap. When beneficiaries reach that limit, the plan kicks in to cover medical expenses for the rest of the year (although Part D expenses are calculated and managed separately).
How to Choose a Medicare Advantage Plan
There are so many options when it comes to choosing a Medicare plan. It can feel overwhelming at times. When it comes to choosing a plan, insurance professionals can help in this process, because they dedicate themselves to learning the plan benefits and all the different options that are available. They can also guide you in figuring out which plan might be the best plan for you.
It comes down to your priorities:
HMO vs PPO
HMO stands for Health Maintenance Organization. If you enroll in an HMO, you will need to select an In-Network Primary Care Physician or PCP. This primary care provider will be in charge of coordinating your care and you will need to see this provider first for your healthcare needs, except in an emergency. If you need to see a specialist, the PCP will refer you to a specialist.
HMOs will often come with lower premiums. However, these plans are less flexible in regard to healthcare providers. In addition, out of pocket costs will vary.
PPO stands for Preferred Provider Organization. For these plans, you do not need to select a Primary Care Provider. You do not need a referral to see a specialist. PPO’s have both in-network and out of network options. Although you have the freedom to go see any doctor you like. If the doctor is out of network, it will have a higher cost associated with it.
PPO’s will come at higher premiums, but gives you more flexibility and out of network options. A broker can help you find a plan that best fits your situation.
Choosing a Medicare Plan requires research, time and expertise.
As you can see, numerous factors will come into play in your decision.
Working with a licensed agent who will research all the options available to you, as well as address your specific concerns, is still the best way to find a Medicare policy that suits your needs and budget.