Transcript of Medicare Advantage Plans Video
If you've been checking with your doctors about what plans they take, chances are that you may have come across a provider who tells you Medicare Advantage plans are bad. Or perhaps you're turning 65 soon, so you've been asking your friends about their Medicare plans. You may also have had a few friends tell you the reasons why they would never enroll in a Medicare Advantage plan.
So, are Medicare Advantage plans bad? Fortunately, no. They are, in fact, an important option within Medicare, and it's good that you have some choices. The reality is that Medicare Advantage plans are really just often misunderstood. Too many Medicare beneficiaries try to enroll in coverage on their own without the free help from a Medicare insurance broker like Boomer Benefits. They often miss some important details when they do this and are later unhappy with the plan. This is not the fault of the plan though, they just didn't do thorough research ahead of time to learn how a Medicare Advantage plan works. So,let's dive in on some of the reasons why so many people think Medicare Advantage plans are bad. I'll share some things that Medicare beneficiaries have reported to us, over the years, that they don't like about these plans. Then you can decide for yourself whether a Medicare Advantage plan is right for you.
When you are covered by a Medicare Advantage plan, you typically have lower monthly premiums than what you would pay for a Medicare supplement. But the flip side of that is that you will pay copays or coinsurance out-of-pocket as you use health care services. It's more of a pay-as-you-go program. This is the opposite of how a Medicare supplement, such as Plan G, would operate. With a Plan G, you would pay a higher premium upfront but you have little to no spending on the back end. No copays for doctor visits or lab work or physical therapy, no daily hospital copays. No coinsurance to pay for other Part A and B services like cancer treatment, durable medical equipment, or diagnostic imaging.
So, if someone has been enrolled in a Medicare supplement and grown used to having little to no copays at the time they use medical services, then sometimes the pay-as-you-go feature in Medicare Advantage plans can be a shock. You might pay $10 or $20 for a primary-care doctor visit or $40 or $50 to see a specialist. Then that doctor sends you down the street for blood work and you pay another copay for that. Maybe he schedules you for an MRI and, on your plan, your copay is $200. If you didn't do your research ahead of time and expect these charges, then you might feel a bit nickeled-and-dimed until you get used to it.
Now, there's a pretty easy solution for avoiding this particular problem. Before you enroll in a Medicare Advantage plan, review the plan summary of benefits. Your agent will go over this up front with you. This summary lists all the costs for various medical services in detail, and you should look for the costs related to the kinds of services that you use most often. For example, if you have diabetes, find out what your share of the cost of diabetes supplies will be on that plan. If you use regular oxygen for a breathing disorder, check to see what the summary of benefits says you will pay for oxygen, as that is likely a recurring product or service that you will need over and over again throughout your lifetime.
If you carefully review the summary upfront, then these expenses, as you go along, should come as no surprise to you. Unfortunately, people fail to read the fine print, and then they end up thinking that their Medicare Advantage plan is bad when, in fact, it just works differently than a Medigap plan. Medicare Advantage plans are paid by Medicare itself. When you enroll in a plan, Medicare pays the insurance company to take on all of your health risk. The insurance company then can also charge you whatever monthly premium it wants for the plan itself.
Many Medicare Advantage plans will set very low premiums, or even a zero premium, for the plan. They do this, of course, to attract you to the plan so that they can get paid by Medicare for your membership in the plan. However, that zero premium is confusing to Medicare beneficiaries like you. As you may know, if you've read my book "10 Costly Medicare Mistakes," many Medicare beneficiaries assume that a zero premium on their Medicare Advantage plan means that they don't have to pay for Part B. This is false. Enrolling in a zero premium Medicare Advantage plan does not excuse you from paying for Part B. And, so, you can imagine that this can be pretty upsetting for someone who enrolls in a Medicare Advantage plan thinking that now their Part B premium will stop being deducted from their Social Security check.
If you stay with original Medicare and you get a Medigap plan, you have access to nearly a million providers nationwide. There's no network and you can see any doctor that accepts Medicare. However, Medicare Advantage plans have networks which are often local or regional, so the plan's entire network might have only a few thousand providers. That network could be in just one county where you live, or in a few counties, or even as large as statewide. Some people enroll in a Medicare Advantage plan without realizing that their plan has a network. They fail to check with their favorite doctors and hospitals to confirm that they participate in the plan's network. Then they go to use their coverage and their doctor turns them away because he or she doesn't accept that particular coverage.
Now, this one is really easy to avoid by checking the plan's provider directory online before you enroll in the plan. Be sure that you confirm the doctor's participating in the exact plan name of the plan that you're thinking about. Some insurance companies operate multiple networks in the same local area. For example, an insurance company may offer both an HMO plan and a PPO plan in your area. These networks will be different from one another. Your doctor may participate in one but not the other. So if you check the wrong directory, you could come up with a false result.
You may also want to contact your provider's billing office to double check with them. Tell them that you are thinking about enrolling in ABC Medicare Advantage HMO plan and you want to confirm that they are in the network for the plan. Notice that I included the full plan name there. You should do the same when confirming participation with your own providers. Keep in mind that some plans may require you to designate a primary-care physician. If you enroll in a Medicare Advantage plan with a standard HMO network, then you will usually have to choose a primary-care provider. That doctor will likely need to issue you a referral before you can go and see a specialist on the same network.
Many people feel this is a hassle and they don't like it. If you think you would be annoyed by this, then you may want to stay away from HMO plans and consider plans with more flexibility, such as a Medicare Advantage PPO plan or a Medigap plan. In our "New to Medicare" webinars, one of the things that I always go over is the fact that Medicare Advantage plans can change their benefits every year. In fact, they can change the plan's premiums, provider network, pharmacy network, copays, coinsurance and deductibles.
They can also change the medications that appear on the plan's drug formulary. Your plan on January 1st can literally be very different than it was on December 31st. This means that if you enroll in a Medicare Advantage plan, you must do your due diligence every year. Sit down in September to review the annual notice of change letter that your plan mails out to you. Look to see what's changing. If you don't like the changes, you can use the Fall Medicare Annual Election Period to choose a different plan for the next year.
You may want to pay particular attention to some of the ancillary benefits. Many Medicare Advantage plans offer built-in ancillary benefits for things like dental or vision or hearing. If you read the fine print though, these benefits can sometimes be quite limited. For example, your plan may offer a dental benefit that covers preventive services only leaving you on the hook for more expensive dental work. Or your plan may give you a $100 credit toward eyeglasses but only every 2 years. This is usually not enough to cover the entire cost of a new pair of glasses. Read the details and know that these benefits can also change from year to year. So, if you join a plan simply because you wanted the built-in eye exam and that plan reduces or eliminates that benefit for the next year, you won't know that, unless you took the time to review your annual notice of change in September. If you're the kind of person who isn't likely to sit down and do your homework each year, you may end up feeling disappointed with your Medicare Advantage plan when really it was simply the plan exercising its annual right to change its benefits.
Medicare Advantage plans all have an out-of-pocket maximum limit to protect you. This is a good thing. It protects you from spending beyond a certain dollar amount each year on Part A and B services. The downside is that the plans can set that out-of-pocket maximum as high as $7,550. For people on fixed incomes, coming up with $7,550 for medical expenses in a calendar year could be a lot. But, of course, you would only spend this if you are incurring a lot of health care services, and that's not going to happen every year. So, be aware that some things on Medicare Advantage plans can cost as much as 20% of the service.
We often see coinsurance for things like durable medical equipment, chemotherapy and other Part B drugs, radiation and dialysis. These are very expensive services and you could rack up a lot of charges in a short time. Over the years, here's something I've seen happen several times. Joe is diagnosed with cancer in September. He starts chemo in October, and his charges for the next 3 months are high enough that he spends his full out-of-pocket maximum. Then, in January, the plan resets but he is still undergoing treatment or he undergoes a second round of treatment later that year. If he hits his out-of-pocket maximum again, he's spending many thousands of dollars in a period of just a few months in the fall and the winner. If this worries you and you don't have money set aside for a rainy day, then you may want to consider a Medigap plan instead.
Insurance companies are in business to make money, so, in general, they want to make sure that, before a treatment or service is provided, that treatment or service is medically necessary. For some services, they may require that your provider get a prior authorization for the service or treatment before it is provided to you, as the patient.
Sometimes prior authorization requests can take a few days, or even weeks, for approval. We also see some prior authorizations denied because the plan doesn't deem the service to be reasonable and necessary. This is why some doctors get frustrated with Medicare Advantage plans in general. Now this is just an ordinary part of the world of health insurance and it doesn't mean that your plan is bad. If you want fewer prior authorizations, consider sticking with original Medicare and Medigap plan where you'll run into them less often.
While I understand why sometimes Medicare Advantage plans disappoint certain people, I also know that here, at Boomer Benefits, our own clients who enroll in them generally seem pretty satisfied with them. That's probably because our team goes into exhaustive detail about how the plan works whenever we enroll someone so that there are no surprises later on.
So, if you are concerned about whether a Medicare Advantage plan is right for you, be sure to check out our other videos here on YouTube, about Medicare Advantage plans.