Understanding Medicare Advantage Plans

By October 5, 2015Medicare, Planning Ahead

by Beth Donner, CRPC

Medicare Advantage plans are also called Part C or Medicare Complete plans. At age 65 (or at a later age if you continue working and remain on a group health plan), you are eligible for Medicare. When first eligible, you will need to make a decision whether to enroll in Original Medicare or a Medicare Advantage plan.

If you choose to enroll in a Medicare Advantage plan you need to understand this plan will act as a replacement for Medicare Part A (hospital insurance), Medicare Part B (medical/outpatient insurance), a MedSupp plan and probably a Part D (drug) plan; thus a Medicare Advantage plan can be a “complete” replacement for Original Medicare.

Medicare Advantage plans are sold and marketed by private insurance carriers and are primarily network plans that allow you to go to a specific list of doctors, hospitals or other health care providers. Since this model involves a network, you may need to obtain a referral from your primary care physician if you see other doctors or specialists. To be eligible for a Medicare Advantage plan, you must have already activated Part A and Part B of Original Medicare.

Medicare Advantage plans are required to cover all the services that Original Medicare covers, except for hospice. Hospice is palliative, end-of-life care, which is covered by Original Medicare whether you are on Medicare Advantage or not. You will have coverage for emergency care, even if provided by an out-of-network doctor or hospital; however, emergency care is not covered if you’re outside the United States.

There are 10 insurance companies offering Medicare Advantage policies in 2015 in North Carolina. The plan options and carriers vary by county; however, not all carriers and all plan designs are offered in all counties.   Many Medicare Advantage plans offer additional benefits that include coverage for dental care, eyeglasses, hearing coverage or wellness programs, which makes it essential to closely compare all features of any plan.

It’s vital to pay attention to designated enrollment periods as there are only two primary opportunities to enroll or make changes to your plan:

  1. Initial Enrollment Period/IEP includes three months before, the month of, and three months after your 65th birthday.
  2. Annual Election Period/AEP runs from October 15 through December 7 for 2015. This allows a person already enrolled on a Medicare Advantage plan to make any desired changes.

Allowed changes might include changing from a Medicare Advantage plan to a different Medicare Advantage plan or returning to Original Medicare.

A word of caution before returning to Original Medicare – if you decide to get a MedSupp plan to supplement gaps in Original Medicare, you may have to go through an underwriting process where health status is reviewed and due to pre-existing conditions and have to pay an increased premium, have your coverage delayed or even be declined. Don’t fall prey to this unintended consequence. You might consider outside assistance before attempting this significant change.

All changes that are made will become effective Jan. 1 of the following year.

Additional online resources include www.Medicare.gov and www.ncdoi.com/SHIIP/

 

Donner is a Chartered Retirement Planning Counselor and can be reached at Beth@DiversifiedPlanning.com or 919-601-0501.