In our previous blog, we went into details on Medicare Part A (hospital stays) and Part B (doctor services). We also talked about when and how to sign up. If you have yet to read that blog and would like to, click on this link that will take you to Part One: https://www.yoderinsurancesolutions.com/post/what-you-need-to-know-about-medicare-part-one. As we went into depth about Original Medicare, we brought to light that this traditional health insurance program, run by the Federal Government, covers many health-care expenses, but does not cover everything. Even with covered health-care services, beneficiaries are still responsible for a number of copayments and deductibles which can easily add up as there is no maximum-out-of-pocket. Original Medicare also does not cover certain benefits, such as routine vision and dental as well as prescription drugs. If original Medicare (Part A and B) is your only coverage, you will be responsible for paying those costs out-of-pocket. As a result, many people with Medicare enroll in these two types of plans to help cover the gaps in coverage. The first option is a Medicare Supplement (or Medigap) that works alongside your Original Medicare coverage. The second option, which we will be going into depth on today, is a Medicare Advantage Plan, also referred to as Medicare Part C.
If you enroll in a Medicare Advantage Plan (Part C), you’re still in the Medicare program. This plan combines Parts A and B into one plan and is administered by private insurance companies. Many of these plans are advertised as a $0 monthly premium during the Annual Enrollment Period. There are other costs to consider, however, such as deductibles, copays, and coinsurance. Most of these plans do include prescription drug coverage, while also offering additional benefits, such as routine vision and dental, as well as health and wellness programs. Under Original Medicare, you would pay for these services out of pocket. Also known as Medicare Advantage Prescription Drug plans or MAPD, these plans give you the convenience of having all your Medicare benefits administered through a single plan. The plans may also include fitness memberships, commonly referred to as Silver Sneakers, that will pay for your monthly gym membership. They also often include an Over-The-Counter (OTC) allowance for products such as cough syrup, Band-Aids, vitamins and supplements, pain relievers, personal care items, etc.
There is flexibility and differences between plans. One large difference is whether your providers are in or out of network. The majority of Medicare Advantage plans either have an HMO network or a PPO network. HMO plans, or Health Maintenance Organization, requires you to seek care from providers in your network. If you happen to receive care out-of-network, it will not cover the cost of care in most circumstances. Preferred Provider Organization plans (PPO) allow you to choose health care providers. However, if you see a doctor out of network, you will usually pay more than if you would with an in-network provider. With either plan, it is best to research and know which doctors and hospitals are in your network prior to your visit. We are always here to help determine which providers are in your plan's network.
Enrolling in Medicare Advantage
In order to enroll in Medicare Advantage, you must
Already have Original Medicare, Part A, and Part B
Live in the service area of the Medicare Advantage plan you’re considering
Not have end-stage renal disease (with some exceptions)
Sign up during an eligible period
There are three different periods that make you eligible to enroll.
Initial Enrollment Period (IEP)
Annual Enrollment Period (AEP)
Special Enrollment Period (SEP)
The first opportunity to enroll is your Initial Enrollment Period (IEP). This is your first chance to enroll in Medicare and choose the coverage that you want. Your IEP is 7 months long and includes your birthday month (or 25th month of getting disability) plus the 3 months before and 3 months after.
The next opportunity is Medicare’s Annual Enrollment Period (AEP) which happens each year from October 15 to December 7. You may change your coverage choices during this time if you decide to. Changes made during this period will go into effect on January 1.
The third and final option when enrolling is Medicare’s Special Enrollment Period (SEP) for qualifying life events. Some examples of this include moving your primary residence or leaving/ losing an employer's group health plan.
One thing to keep in mind is you could be charged penalties if you sign up after your Initial Enrollment Period (IEP) ends unless you qualify for a Special Enrollment Period (SEP). For example, someone may believe they are healthy and don’t need coverage, so they forego having any insurance until age 70. They then try to sign up and are still able to get insurance, but could be penalized by Part A, Part B, and Part D, where they may receive a late enrollment penalty every month for the rest of their lives. Another example is a married couple over the age of 65 where one is still working. If they're both insured through the employee's health coverage, they will both be able to sign up for Medicare coverage through the Special Enrollment Period without penalties upon retirement.
In our upcoming blog, we will go into depth on another option for additional Medicare coverage, the Medicare Supplement (Medigap). If you have any questions on Medicare Advantage or want to learn more about any of the life or health products we market, please do not hesitate to reach out to one of our consultants. We would love to hear from you and help you with all of your insurance needs.