Medicare vs. Medicare Advantage
Now is the time to start understanding Medicare vs. Medicare Advantage Plans. We are currently in the middle of Medicare’s annual open enrollment period. This year the period is from October 15- December 7. If you are like me, insurance is just too much. It is so complicated, and I feel like no matter what I do I end up spending a ton of money! If you are thinking: Medicare isn’t like standard insurance, I can’t go wrong with the plan I chose, then you are wrong! Over the past several years, Medicare has changed greatly. Let’s start with some of the basics.
What is Medicare?
According to medicare.gov, Medicare is the federal insurance program for people 65 and older. It is a four-part program classified by parts A, B, C, and D. Part A provides inpatient/hospital coverage, part B provides outpatient/medical coverage, part C offers an alternate way to receive your Medicare benefits, part D provides prescription drug coverage.
One of the best phrases that I have heard to describe Medicare is, alphabet soup. All of those different parts can seem confusing and not worth the trouble. All those letters can be overwhelming, so maybe you become tempted by other options out there. Simple options. “All in one” options without all the alphabet soup. This is where the dozens of commercials for zero-dollar premium Medicare Advantage plans that are all-in-one coverage can become tempting. These “all in one” plans include benefits for prescriptions, vision, dental, and maybe even a free gym membership. This “all in one” idea might not be so bad. It sounds like a simple solution to a complex problem, and the best part being…YOU WILL SAVE MONEY! So, why are these plans bad? It’s not that Advantage plans are bad; they just are not a good fit for everyone and the companies don’t want you to know that.
Medicare Advantage Plans-Simplified
Now let’s break down these Advantage plans to simplify things a little. These plans are often attractive to people due to the low premiums. This is where I always go back to what my dad told me when I first got married and was trying to pick my husband’s employee plan or my company plan. He said, “Look, the thing with insurance is, they are going to get you one place or the other. Either the premium is high or the copays and deductibles are high. No matter what, you pay.” You know what I have discovered in the years since? He was absolutely right. Insurance companies are just like any other business…they are out to make money and disguise the costs however they can.
So, when considering Medicare vs Medicare Advantage, don’t confuse zero-dollar premiums with zero-dollar copays. You can expect to pay a copay for every doctor visit, test, and service you receive if you choose an Advantage plan coverage over Tradional coverage. Another consideration, is that while you are not paying a Part A premium, you are not getting out of paying your Part B premium. You still have to pay the monthly premium for Part B while enrolled in Medicare Advantage plans. In general Medicare Advantage plans cost less upfront, but most likely, they will cost more in the long run.
Moving on from cost, another consideration to keep in mind is access and availability. I don’t know about you, but I feel like I should be able to choose the doctor or specialist that I get to see. Original Medicare offers broad access to doctors, because the program doesn’t have a network. This means beneficiaries can visit any doctor, specialist, hospital, or urgent care center that accepts Medicare. Medicare Advantage plans operate within a smaller network of doctors depending on who is willing to negotiate reimbursement with them. Also, be aware that your doctor is free to leave the plan’s network at any time of the year. Unfortunately, you will still be stuck in that plan until the next Medicare Annual Enrollment Period. You will have to either pay 100% of your medical costs or find a new doctor within the plan’s network.
Insurance or Federal?
So, let’s say you have managed to find a doctor or specialist within network for your Advantage plan, everything should be easy from there on. Or maybe not. Medicare Advantage plans are not a federally offered insurance program, whereas Traditional Medicare is administered by the federal government. Medicare Advantage plans are plans created and offered by insurance companies. This means not only are many doctors not in-network, but even if they are, you still need to get what is called a prior authorization if you need almost any type of medical procedure, scan, or test. Trust me on this, if you work in healthcare, you know that a prior authorization is not fun, not easy, and often times denies medically necessary services for patients. The simple version of all of this is, with Medicare Advantage plans, your insurance companies get to decided who you do or don’t see and what services they feel you should be provided. Keep in mind, these insurance companies are not medical professionals, yet they get to decide what you need for your health.
Let’s Take A Vacation!
Do you like to travel? Me too! So, when I go on vacation to Florida, and my kids are rough housing in the condo and one falls, I should be able to go to the nearest hospital to seek treatment and expect my plan to cover the services, right? Seems reasonable to me. The difference between Medicare and Medicare Advantage plans here is that Medicare is the same across the entire country. Medicare Advantage Plans, however, are not all the same and not all have multi-state coverage. Depending on the plan you choose, if you travel, you may pay the highest costs when seeking healthcare services outside of the plan’s established provider network.
There is Still Time
So, you have picked a plan, have a doctor that is in-network, know you won’t be travelling for any reason, hope that your doctor stays in-network for your plan, and you have a prior authorization completed for your next scan, you are all set to go! Maybe avoiding the alphabet soup with Traditional Medicare wasn’t really that bad of a choice after all. Don’t worry, you still have from now until December 7 for Medicare open enrollment.