Advantage Plans (Medicare Part C) – Should I Elect an Advantage Plan?
For the remainder of the summer, we will be reposting educational material about Medicare with edits and updates as appropriate. If you didn’t watch these videos, please do, and/or share the information with someone who will benefit. Please tune back in after Labor Day for new material. Thanks, and have a wonderful summer.
Today’s video originally recorded in 2021, discusses Advantage Plans which are an alternative to original Medicare offered by private insurers. We believe it is important to evaluate the pros and cons of remaining in original Medicare with its constellation of Medicare supplements (also offered by private insurers) and Part D plans (a government benefit administered by private plans) or electing an Advantage Plan. Unfortunately, this exercise can seem overwhelming. There are, in our opinion, just too many options for most consumers to evaluate. During most people’s working lives, their employers or unions have narrowed options so they only have to choose between a handful of plans offered during open enrollment. In comparison, there can be around 30 Advantage Plans offered in a given region, so trying to find the best option can feel like a daunting task.
However difficult it may be, individuals must approach the consideration of opting for an Advantage Plan with the same rigor as other important financial decisions. Our concern is that so many seem to enroll as a result of very persuasive advertising rather than understanding their Advantage Plan options and how they differ from original Medicare. Our advice is to consider:
- The premiums associated with various Plan options
- Other out-of-pocket exposure – deductibles, copayments and coinsurance, and out-of-pocket maximums
- The product types of the Plan options, e.g., HMO, PPO, etc.
- The provider networks of the Plan options and whether there are out-of-network benefits
- The rules of the Plan options
The government allows Advantage Plans to offer some limited benefits not available through original Medicare. These can include some dental benefits, vision coverage, transportation or discounted gym memberships, for example. However, Advantage Plans are managed care products of some sort with networks, rules and medical management. As a result, when electing an Advantage Plan, one should understand the restrictions involved versus original Medicare. It is also important to understand that an Advantage Plan is always associated with a given geographic area and that must be factored into any decision to relocate.
One can choose an Advantage Plan when going onto Medicare or during the Annual Open Enrollment Period which is October 15 through December 7 of every year. From January 1 to March 31, one can disenroll from an Advantage Plan and return to original Medicare or change Advantage Plans. Although this means that everyone can go back and forth between original Medicare and an Advantage Plan, one cannot always obtain a Medicare supplement when returning to original Medicare. There is a federal guaranteed issue period for Medicare supplements which extends six months from one’s Medicare Part B effective date. You also have a guaranteed right to purchase a supplement if you enrolled in an Advantage Plan for the first time within the last 12 months and want to return to Original Medicare. For a more complete list of when you are guaranteed a right to purchase a supplement, follow this link to medicare.gov. Aside from these guaranteed issue situations, in most states Medicare supplements are medically underwritten and the insurer has no obligation to enroll an individual with pre-existing conditions. New York, Connecticut, and Massachusetts consumers have more protections regarding their ability to obtain a Medicare supplement after the federally guaranteed issue period ends since medical underwriting is not allowed in those states.
For those who remain fortunate enough to continue to enjoy subsidized retiree medical benefits, many employers have limited their retiree medical coverage to an Advantage Plan. Many other employers offering retiree medical benefits offer retirees a subset of supplement, Part D and Advantage options through a private exchange.
More than 40 percent of Medicare beneficiaries are on Advantage Plans. Since that is millions of Americans, Advantage Plans are clearly a popular option to consider. Again, however, we advise thoroughly understanding the pros and cons of various plans before opting out of original Medicare.
Please watch the video. Thank you.