Medicare Advantage (MA) plans contract with Medicare on an annual basis. Medicare pays each MA plan a fixed monthly amount for each member. This amount varies by county and is readjusted each year based on a Medicare formula. In turn, the MA plan must provide, at minimum, all Medicare-covered services. The MA plan may also offer additional services not covered by Medicare, such as hearing aids, dental care and eye exams. These additional services vary by geographic area. In 2020, MA plans may offer expanded supplemental benefits that no longer need to be primarily health related.
The three types of supplemental benefits plans may offer are:
- Standard – These benefits are offered to all enrollees, but must be health related (i.e. vision, hearing and dental). Such benefits have been offered for years.
- Targeted – New since 2019, these primarily health-related benefits are offered to only to certain enrollees based on health or disease status.
- Chronic – New in 2020 and called Special Supplemental Benefits for the Chronically Ill (SBCI), these benefits are offered to only qualifying chronically ill enrollees and are not primarily health related. Benefits include a variety of social supports, such as meal delivery, non-medical transportation, structural home modifications, air conditioners, pest control, etc.
While some of the new social supports benefits a plan offers may be enticing, you will not know for sure if you qualify until after enrolling in the plan. Make sure to carefully consider all aspects of a plan’s coverage and costs, network of doctors, etc. before deciding whether or not to enroll. Details on these supplemental benefits can be found in each plan’s Evidence of Coverage posted on their website.
Many MA plans also charge a monthly premium that can vary by region. This is in addition to paying your Medicare Part B monthly premium.
Most MA plans also require a copayment for services, such as doctor visits. Sometimes these copayments are lower than the cost-sharing in Original fee-for-service Medicare, and for other services, they are more. For certain services, however, namely kidney dialysis, chemotherapy and skilled nursing care, MA plans cannot charge more than the cost-sharing in Original Medicare. This requirement is due to health care reform.
Also, MA plans must establish a mandatory maximum out-of-pocket (MOOP) amount for all Medicare Parts A and B services. After meeting the MOOP, the plan will cover 100% of your remaining Medicare-covered costs for the rest of the calendar year. In 2020, the mandatory MOOP is $6,700. Plans cannot have a MOOP amount higher than $6,700, but they can have a lower MOOP amount.
Many MA plans offer prescription drug coverage. These plans are often referred to as MA-PDs. Other plans do not offer Medicare Part D drug coverage and are referred to as MA-only plans. If you enroll in an MA-PD, you do not need to enroll in a stand-alone Prescription Drug Plan (PDP). If you join an MA-only plan that is an HMO or PPO, you are not allowed to join a separate Medicare Part D plan. Therefore you will have no drug coverage and may incur a penalty if you later decide to enroll into a Part D plan. However, if you choose a PFFS plan without prescription drug benefit, you may combine it with a stand-alone Medicare Part D plan.