Medicare: A Supplement Plan or an Advantage Plan?
The job of an independent insurance agent is to help you make the best health insurance purchase decision given your unique health needs and your budget. Our job also includes periodic review of your situation as needs change to ensure you continue to have the best coverage.
For those turning 65 and new to Medicare one of the most important decisions to be made is whether to choose a Medicare Supplement Plan (Medigap) or a Medicare Advantage Plan. You cannot have both a Medigap and an Advantage Plan at the same time. You can switch from one to the other during special time periods if specified conditions are met.
Traditional Medicare (Part A + Part B) gives broad service coverage but does not pay 100% of approved charges. The “gap” can be filled in part or whole by a Supplement plan. Supplement Plans generally do not cover vision or dental care, hearing aids, eyeglasses, or private duty nursing.
To qualify for a Supplement Plan You must be enrolled in both Part A and Part B. There are defined time frames during which you are eligible to purchase these plans. Missing these opportunities could result in a plan no longer being offered at a future date. Late enrollees also risk being subject to underwriting criteria and higher premiums.
Supplement Plans are sold by private insurers. The plans are “standardized” and must conform to Federal and State laws. Supplement Plans are identified by the letters A through N. There are 10 plans now offered. E, H, I and J are no longer available. Regardless of which insurer sells the plan, the same basic benefits must be offered. Cost is the only difference between plans of the same letter sold by different insurers. Medicare does not pay the cost of these policies; the beneficiary/subscriber pays the premium. This is in addition to the Part B premium that you pay to Medicare.
The differences among the lettered plans are best grasped in a table format. Suffice it to say that Plan F offers the most comprehensive gap fill. The percent of deductibles and coinsurance paid for you varies among the plans. Some plans do not cover certain services, such as foreign travel emergencies or skilled nursing facility coinsurance. To offset this Plans K and L have annual out of pocket expense limits. Supplement plans do not include a prescription drug benefit. A Prescription Drug Plan can be purchased separately.
Medicare Advantage Plans:
Advantage Plans are offered by private insurers who contract with Medicare to provide all your Part A and Part B benefits. Some offer vision and dental benefits as well. Many Advantage Plans include a prescription drug benefit. Advantage Plans can be a Health Maintenance Organization (HMO), a Preferred Provider Organization (PPO), a Private Fee-for-Service Plan(PFFS), or a Special Needs Plan or Chronic Care Plan… HMOs and PPOs are most common. They are assigned a quality rating (1-5 stars) based on a federally monitored program of performance standards. It is important to check the rating before purchase.
Advantage Plans have a Managed Care component to monitor and improve quality of care and to control costs by minimizing unnecessary duplication of services. Preventive care such as cancer screening and immunizations are encouraged. Usually, a primary care physician is selected. Some services may need prior approval. There are panels of in-network specialists. In general, the bigger the enrollment in the local or regional plan, the greater the number of specialists in the network. Out-of-network care may be partially covered. Some plans have maximums on out -of – pocket expenses.
Open Enrollment is coming soon, October 15-December 7, 2017