Why Compare Medicare Advantage Plans?

According to the Kaiser Family Foundation, Medicare recipients can find an average of 39 Medicare Advantage plans in their local service area. Abundant choices give beneficiaries a chance to find a suitable option. However, Medicare beneficiaries should spend time learning how these plans work to make choices that will suit their healthcare needs, budgets, and preferences.

How to Get Started

Read through the cost considerations, the plan feature and type comparison points along with the quick comparison chart. Once you have a working knowledge of the comparison points you can either visit Medicare.gov’s coverage option tools or find help in your plan selection by speaking with a licensed health insurance agent. Make sure to reference the itemized list of questions to ask at the end of this article.

Medicare Advantage Cost Considerations

Medicare will still collect Part B premiums from MA plan members. Beyond the premium, consider these potential costs of Medicare Advantage plans:

  • Premiums: Plans generally offer the same rate for all beneficiaries in a local area. Some plans charge a $0 premium. Beneficiaries still pay for Part B, but some MA plans offer a Part B premium reduction.
  • Deductibles: The policy may have one annual deductible of different deductibles for various healthcare services, like ER visits or prescriptions.
  • Copayments: The plan may have fixed copayments for various services. For instance, an office visit to a primary doctor may cost a $25 copayment, and generic prescriptions might require a $5 copayment.
  • Coinsurance: In contrast to a fixed copayment, coinsurance works as a percentage of the bill. For instance, 20% coinsurance for a $100 office visit will cost $20.

Medicare Advantage Plan Features to Compare

Medicare Advantage plans provide Medicare recipients with another way to receive Medicare Part A and Part B benefits. The government run Centers for Medicare & Medicaid Services (CMS) approves these plans if they offer benefits as good or better than Part A and B.

In Addition to Medicare Part A and B services most MA plans have these features:

  • They may include prescription drug coverage, so enrollees won’t need to enroll in a separate Part D plan.
  • Most rely on provider networks, so members may need to seek non-emergency healthcare from a network provider or risk paying more or not having services covered. Some plans make members choose a primary care doctor and ask for referrals to visit specialists.
  • Plans may include cost-sharing in the form of copay, coinsurance, or deductibles, and these may differ for various healthcare services.
  • Part C plans each have an annual out-of-pocket limit, so members won’t need to pay deductibles or copays once spending exceeds the limit. According to AARP, out-of-pocket limits generally range from $3,000 to $6,700.
  • Most plans come with extra benefits that Original Medicare doesn’t offer. These might include routine dental and vision coverage, gym memberships, discounts on non-prescription medication or supplements, and transportation.

Medicare Advantage Plan Types to Compare

Various types of Medicare Advantage plans work differently. Some kinds of Medicare Advantage plans, like HMOs, won’t cover any non-emergency healthcare services outside of the plan’s network. In contrast, PPOs allow members to choose healthcare providers outside the network, but they will charge more for out-of-network coverage and premiums.

Common kinds of Medicare Advantage plans include:

  • HMO: Health Maintenance Organizations require members to get most medical services from an in-network provider. They typically make exceptions for emergencies. They typically also require members to choose a primary care doctor and consult with that physician for referrals to specialists.
  • PPOs: Preferred Provider Organizations charge the least for in-network services but will allow out-of-network visits for a higher cost. They generally don’t require members to choose a primary care doctor or ask for referrals.
  • Private fee-for-service: These plans don’t use networks, but the healthcare provider must accept them. Some PFFS plans also have a network with providers who have already agreed to accept the plan.
  • SNPs: Special needs plans limit membership to groups of people with particular characteristics or diseases. Examples may include people who live in a nursing home, are dual-eligible for Medicare and Medicaid, or suffer from chronic or acute health conditions. Most SNPs work like HMOs and offer care coordination and benefits particularly helpful for their intended members.
  • HMO-POS: These plans primarily work like HMOs, but they cover some out-of-network services for a higher cost.
  • MSAs: Medicare Savings Account plans combine a high-deductible Medicare Advantage plan with a health savings account. They work similarly to HSA plans for younger people who aren’t on Medicare, but Medicare will seed the fund at the beginning of each year.

Which Medicare Advantage Plan Types Do Most People Choose?

According to the Kaiser Family Foundation, HMOs make up almost 60% of all plans offered, and local PPOs account for 37%. Also, these plans have similar features to the types of health insurance policies people have already experienced from work or individual policies.

Some other reasons these types of plans have gained popularity probably include:

  • HMOs typically do a fantastic job of controlling costs, but they limit choices as members almost always need to use providers from the plan’s network.
  • PPOs typically cost more than HMOs, but they can offer more flexibility for members who prefer to have the option to choose their own doctors or who plan to travel around the country.

SNPs are relatively common in most service areas as they cater to dual-eligible Medicare and Medicaid beneficiaries and people in long-term care facilities. SNPs for people with serious medical conditions offer benefits tailored for these groups. Some examples of SNPs for people with specific diseases might include plans for patients with cancer, heart disease, ESRD, and diabetes.

PFFS plans never gained much traffic, and the number of these plans to choose from has continued to decline. MSAs appear to offer good value for people who want to control costs, but they never gained the popularity of HMOs or PPOs.

Quick-Comparison Chart of Medicare Advantage Plan Types

This table makes it easy to pick out key features of popular types of Medicare Advantage plans.

Compare Medicare Advantage Plans HMO PPO SNP
Uses Provider Networks Yes Yes Yes
Requires Primary Care Doctor and Requires Referrals Typically, Yes Yes Yes
Covers Non-Emergency Care Outside network Typically, No Yes No
May Offer Prescription Coverage Yes Yes Yes

Questions To Ask a Licensed Agent

Listed below are questions you can ask an agent as you compare different health plans which should enable you to make a more informed decision regarding your coverage options. When making the call be sure to ask for the agent’s full name, their company, and the best number to call them back at directly in case you get disconnected.

  • How much do I have to pay out-of-pocket for the plan including: monthly premiums, deductibles, copays and coinsurance?
  • Is there a copay for doctor visits? If so, what is it? Is there a separate copay for specialists?
  • Can I see a specialist without a referral?
  • Is there an annual out-of-pocket cost cap for the plan? If so, how much?
  • Does this plan include dental, vision care, and other special services?
  • Will my specific doctors, hospitals and prescription drugs be covered? If not are you willing to switch to doctors, hospitals, and drugs that are covered on the plan being considered?
  • How will Medicare effect my current healthcare coverage?
  • What is the plan’s star rating it received from Medicare?

Sources:

  1. Medicare Advantage Plan Costs, Medicare. 
  2. How Advantage Plans Work, Medicare. 
  3. Out-of-Pocket Costs in Medicare, AARP.