Medicare Advantage – Part C
Don’t be fooled. Medicare Advantage plans sold by private insurance companies are NOT the same as Medicare Supplement (Medigap) policies.
So what is Medicare Advantage?
The easiest way to think about it is that Medicare Advantage is like a health plan or managed care plan such as an HMO or PPO that you may of had with your employer if they offered group health benefits. You had a network of doctors and hospitals and maybe a small co-pay to see you primary care doctor.
These plans are administered and sold by private insurance companies that are contracted with the federal government. The insurance companies are then paid by the government on a monthly basis based on your enrollment. Each plan must adhere to a standard set of benefits that includes at a minimum Part A and Part B of original Medicare. Most Medicare Advantage plans, but not all, include prescription drug coverage. Additional benefits are often included like dental vision & hearing, health club membership and discount programs.
Why would I choose a Medicare Advantage Plan?
The bottom line is that Medicare Advantage can look very attractive mostly because the monthly premium could be as low as $0. But it requires a more in depth review because as we all know nothing good is ever free. It is unfortunately a common situation for many seniors who rely on social security as their only source of income and therefor choosing Medicare Advantage is the only realistic way to receive healthcare coverage. If you are a healthy senior it probably also looks like a viable choice since maybe you only go see the doctor once or twice a year. Just pay your small co-pay and be on your way. This versus paying for a Medicare supplement or Medigap policy would seem like a good choice. But the reality is today that we don’t know what could happen with our health tomorrow, and this certainly should be a reason to truly compare the difference of Medicare Advantage and Medigap coverage options.
How do I sign up for a Medicare Advantage plan?
There are annual enrollment periods for signing up for a Medicare Advantage plan and you have the option to change plans every year going forward. If you are turning age 65 you’ll have what’s called the ICEP or Initial Coverage Election Period. This is a window that last’s a total of seven months based on your 65th birthday. The period starts three months prior to, the month of your birthday and three months after your 65th birthday. If you choose to enroll in a Medicare Advantage plan the benefits will always start the 1st day of the following month you enrolled in the plan.
Example: Mary turns 65 on July 12th. She decides that she wants to enroll in a Medicare Advantage plan with prescription drug coverage and calls the insurance company to enroll sometime in May. Since her Part B effective date is July 1st, her Advantage plan would start on July 1st.
We always advise working with an independent agent who can guide you on which plan will work best for you and be there for you in the future. It is also possible to call the insurance company directly or sign up for your Medicare Advantage plan directly through the folks at Medicare. The benefits and pricing will always be the same no matter how you choose to sign up.
