Choosing a Medicare Advantage Plan

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Topics on this page:

  1. Questions to Consider When Choosing a Medicare Advantage (MA) Plan
  2. Differences Between Medicare Advantage (MA) Plans & Medigap Policies

1. Questions to Consider When Choosing a Medicare Advantage (MA) Plan

Before enrolling in an MA plan such as a Health Maintenance Organization (HMO), find out as much information as you can about the plan. If possible, talk to people who are enrolled in the plan and ask your doctor about it.

Be sure to find out the answers to these questions:

Physicians

  • Are there specific physicians you want to see? If so, are they in the plan's network of providers (if you're considering enrolling in an HMO or a Preferred Provider Organization, also known as a PPO)?
  • Do the physicians you want to see participate in a different MA plan than the one you're considering? If so, which one(s)? How much will your plan charge if you want to see physicians outside the plan's network?
  • If you're considering a Private Fee-for-Service (PFFS) plan, will your physicians accept that plan's payment terms?

Part D Prescription Drug Benefits

  • Does the MA plan include Part D drug benefits? Note: Several MA plans — such as certain PFFS or HMO plans, — do not offer Medicare Part D benefits.
  • If the plan includes Part D benefits, does it cover the prescription drugs you are currently taking? Check the plan's formulary to find out what is available to you at what cost.

Medigap

  • Do you already have a Medigap policy? If so, you won't need to keep it if you enroll in an MA plan. A Medigap plan only pays benefits while you are in Original fee-for-service Medicare.

Take your time. Do not feel pressured to sign on with any plan — this is your choice and you should take the time to get all the facts. However, you must make a decision before the end of any enrollment period that may apply.

Keep records when you speak with MA plan representatives. Write down the names of people you speak with, their contact information, the date and time of the conversation, and what you discussed.

Know what is and isn't appropriate to discuss about your medical history. MA plans may only deny coverage if you have end-stage renal disease (ESRD). However, plan representatives may question you about your health conditions to help your primary care physician make decisions regarding health care services, and to assess your eligibility for special programs the MA plan provides for people with chronic health conditions.

If you're considering an MA plan in order to save money, make sure you understand the plan's copayments and other cost-sharing amounts for medical services. In some cases, even though the monthly premium is low, charges for doctors' visits, hospital stays and other services may be high.

If you have low income, find out if you are eligible for the Low-Income Subsidy (LIS), which can help cover many prescription drug costs.

To learn about MA plans in your area, contact your local Health Insurance Counseling & Advocacy Program (HICAP) or use Medicare’s Plan Finder Tool on Medicare.gov.

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2. Differences Between Medicare Advantage (MA) Plans & Medigap Policies

Many factors determine whether an MA plan or a Medigap policy is best for you. It is important to consider the plans and policies offered in your area, your health care preferences and your income.

MA plans provide health care services covered under Medicare Parts A and B, and may offer additional services not covered by Original fee-for-service Medicare. If you join an MA plan, you do not need to purchase a Medigap policy. In fact, if you have an MA plan, it is illegal for a company to sell you a Medigap policy.

If you have a Medigap policy when you join an MA plan, you can wait 1 or 2 months to cancel your policy if you are not sure you want to stay in the MA plan. Note: Certain enrollment periods and restrictions apply to joining and leaving MA plans.

You are guaranteed the right to purchase a Medigap policy during the first 6 months you become eligible for Part B (unless you are younger than 65 and have end-stage renal disease) and in a few other situations. You might become eligible for Medigap without a health screening due to changes in your MA plan. Learn more about these Medigap guaranteed-issue events.

Out-of-Pocket Costs

In general, MA plan premiums are lower than Medigap policy premiums. However, copayments may make an MA plan more expensive than a Medigap policy, depending on the services and benefits you use. For example, if you have a Medigap policy and receive cancer therapy under Part B covered services, you will most likely have no out-of-pocket costs. Medicare pays 80% of the cost and Medigap covers the other 20%. In many MA plans, however, if you receive cancer therapy and/or other treatments for serious illnesses such as dialysis, you are often required to pay the 20% as a copayment.

In addition, most MA plans require you to make a small copayment each time you visit a doctor or use other services. Make sure you understand all the costs you will pay in an MA plan before enrolling in one.

Some MA plans provide services in addition to those covered by Medigap policies, such as Part D prescription drug coverage, vision and dental exams, hearing aids and wellness classes. If you have Original Medicare and a Medigap policy, you will need to buy separate coverage for Medicare Part D's prescription drug benefit because Medigap policies are not permitted to include that benefit. Learn more about Medicare prescription drug coverage.

Access to Providers

Certain MA plans (such as HMOs) only allow you to see health care providers who are affiliated with the plan (this is referred to as being in the plan's network of providers). Most Medigap policies, however, allow you to see any doctor you choose.

MA Plan Example: You want to see a doctor for cataract problems. If you have an MA HMO, you must call your primary care physician and get approval to see a specialist within the plan's network. If you obtain approval, you can see the specialist. You may be charged a small copayment for the visit.

Medigap Policy Example: You want to see a doctor for cataract problems. If you have a Medigap policy, you can call a specialist directly and make an appointment. Medicare will cover up to 100% of the standard Medicare-approved amount for this type of visit. The 20% coinsurance will be covered by your Medigap policy. If your doctor does not accept assignment, you may be charged 15% more than the approved amount. This excess charge may be covered by your Medigap policy, depending on whether such charges are a covered benefit of your policy.

Medicare Advantage Plan versus Original Medicare with Medigap Policy
Benefits & Costs Medicare Advantage Plan Original Medicare with Medigap Policy
You are charged monthly premiums (in addition to paying monthly for Medicare Part B). Usually Yes
You can be charged a copayment for each doctor's visit. Usually Sometimes, if the amount of the bill is more than the coinsurance amount. Also, Plan N does have a copayment for doctor’s visits.
The benefits in your plan may change from year to year. Usually No
Some Medicare Part D prescription drug coverage is offered. Depends on plan; many HMOs, PPOs and certain PFFS plans offer drug coverage, sometimes for an additional monthly premium. No policies have prescription drug benefits. Only the older H, I and J policies from before 2006 (which are no longer sold) have some drug coverage. More info: Medigap section.
You may have coverage for extra benefits, such as eyeglasses and hearing aids. Depends on plan No
You may be restricted to a list of available providers. Yes, for some plans. You must use the plan's network of doctors and be referred to a specialist. If you want to see a doctor outside of the plan, you will pay more. The common exception is when you have an emergency outside the plan's service area. No
The premium can change from year to year. Yes Yes
You must be allowed to enroll, regardless of health condition, as long as you have Medicare Parts A and B. Yes. MA plans offered in your area are required to accept you unless they are closed to all new members. If they are closed, they must accept you during the annual election period from October 15 to December 7 each year (except if you have end-stage renal disease). Some other situations in which a plan must accept you:
  • You just turned 65 and went on Medicare.
  • You had coverage under an MA plan and moved out of that service area.
  • You were in an MA plan that did not renew its contract with Medicare or its contract with your provider(s).
Only during the first 6 months after enrolling in Part B (and at certain other special times — see Your Rights to Buy a Medigap Policy). After this 6-month period, plans can reject you based on health conditions or charge you a higher premium.

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Updated Nov 4, 2013

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