What is Medicare Advantage (Part C)?
When you turn 65 or otherwise become eligible for Medicare, you have several decisions to make.
The biggest of them is whether to sign up for Original Medicare or elect to join a Medicare Advantage plan, instead.
Option 1: Enroll in Original Medicare
Original Medicare is administered directly by the federal government and consists of Part A (hospital insurance) and Part B (outpatient services, physicians’ charges, lab and imaging fees, and durable medical equipment).
Most people who go this route choose to add an optional plan that covers prescription drugs, known as Medicare Part D. They also usually enroll in a Medicare supplement insurance plan (Medigap), which helps pay costs that Original Medicare doesn’t cover, including deductibles, copays, and coinsurance.
Option 2: Enroll in a Medicare Advantage Plan
Medicare Advantage – also called Medicare Part C – is an optional alternative to Original Medicare. These plans are private plans that are offered by insurance companies and health services organizations under the auspices of Medicare.
By law, these plans must provide the same range of services and coverage under Medicare Parts A and B. But you access your benefits through a managed care plan (HMO, PPO, or EPO) rather than going right to your doctor’s office, hospital, or clinic.
Both options have advantages and disadvantages, and it’s important to understand the ramifications of both.
This article will take a closer look at Medicare Advantage Plans as they exist in 2024. First, we’ll look at the changes for 2024, then we’ll break down some pros and cons to help you make an informed decision.
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Medicare Advantage, Explained.
Medicare Advantage plans bundle Part A, Part B, and usually Part D benefits into one single plan. They often provide additional benefits not covered by Original Medicare, such as dental, vision, hearing, and fitness programs.
Types of Medicare Advantage Plans:
- Health Maintenance Organizations (HMOs) – Require you to use doctors and hospitals in the plan’s network and usually need referrals to see specialists.
- Preferred Provider Organizations (PPOs) – Offer more flexibility in choosing healthcare providers and do not usually require referrals.
- Special Needs Plans (SNPs) – Tailored for people with specific diseases or characteristics.
- Private Fee-for-Service (PFFS) Plans – Allow you to see any Medicare-approved doctor or hospital that accepts the plan’s payment terms.
There’s a lot to consider when you’re trying to decide which option is best for your needs. It’s always a good idea to talk to an expert who can answer any specific questions you may have.
What’s New in 2024
One of the advantages of Medicare Advantage plans is that they continue to evolve.
Unlike Medigap plans, which by law are standardized and allow for little or no variation in plan design, Medicare Advantage plans have much more latitude to innovate by offering new benefits and services.
Here are some of the key new developments expected for Medicare Advantage plans in 2024:
- Expanded Access to Behavioral Health Services. Medicare Advantage plans will be required to expand their networks of behavioral healthcare providers, such as clinical psychologists and psychiatrists, licensed marriage and family therapists, licensed mental health counselors, and inpatient psychiatric facilities. This will allow for more access to mental health treatment.
- Increased Access to Biosimilar Drugs. Biosimilar drugs are highly similar but more affordable versions of biologic drugs. This could help lower prescription drug costs for Medicare Advantage enrollees.
- Continued Growth in Dual-Eligible Special Needs Plans (D-SNPs). The number of D-SNPs, which are Medicare Advantage plans tailored for beneficiaries dually eligible for Medicare and Medicaid, is expected to continue growing rapidly. From 2019 to 2024, the number of D-SNPs nearly doubled from 465 to 851 plans.
- More “Zero Premium” Plans. About two-thirds (66%) of Medicare Advantage plans with prescription drug coverage are expected to have a $0 monthly premium in 2024. (Beneficiaries will still need to pay the Medicare Part B premium.)
- More Supplemental Benefits Options. Most Medicare Advantage plans are expected to offer even more supplemental benefits like dental, vision, hearing, over-the-counter items, meal benefits, and fitness programs. There’s a lot of innovation happening in the field of supplemental benefits, so it’s a good idea to take a look at your options every year or two to see if any plans in your area offer new supplemental benefits that may be of value to you.
- Increased Transparency on Supplemental Benefits. New rules would require Medicare Advantage plans to notify beneficiaries about any supplemental benefits they have not used during the year. They would need to provide details on what benefits remain, out-of-pocket costs, and how to access them. This aims to increase transparency and ensure beneficiaries are aware of and able to utilize the extra benefits their plan offers.
- More Accessibility for Diverse Populations. Plans will be required to better support cultural and language diversity among their members. They will also need to offer digital health education for those having issues with technology so they can access telehealth services more easily.
Learn More: 10 Medicare Mistakes to Avoid When Choosing a Plan
Medicare Advantage Special Needs Plans
Special Needs Plans (SNPs) are a type of Medicare Advantage plan specifically designed to provide targeted care and limit enrollment to individuals with particular needs or circumstances.
They’re designed for people with specific diseases, certain chronic conditions, or those who are eligible for both Medicare and Medicaid. SNPs provide benefits and care tailored to the specific needs of their members. They include things like more focused care coordination, more customer service expertise on specific medical conditions, and specialized provider networks.
For example, you may have a plan that provides more focused support for people with renal disease who need regular dialysis, for example.
Who Needs SNPs?
People who should consider joining a Medicare Advantage SNP include those with chronic conditions such as diabetes, heart disease, or chronic lung disorders, low-income people who qualify for both Medicare and Medicaid (dual eligible), and those requiring institutional care or nursing care at home.
What’s New in 2024?
Recent developments in 2024 SNPs include expanded services to include more comprehensive care management and coordination.
There has also been an increase in the number of available SNPs, making it easier for eligible individuals to find a plan that meets their needs.
Get Help Finding a Special Needs Plan in Your Area
If you or a loved one has special needs, it’s extra important to enroll in the most suitable plan.
Not all SNPs are available in all areas. But you can get personalized help finding the best SNP available in your area by making an appointment with one of our expert Personal Benefits Managers.
Consultations are free. And some SNP plans are available with zero monthly premiums.
Out-of-Network Care
Medicare Advantage plans have specific networks of healthcare providers.
If you go out of network for non-emergency care, you may face higher costs or no coverage at all. It’s a good idea to check if your preferred doctors and hospitals are in the plan’s network before enrolling.
While you can sometimes use an out-of-network provider, there can be significant consequences.
Here’s what you can expect:
- Higher Out-of-Pocket Costs. When you use an out-of-network provider, you typically face higher out-of-pocket costs. These services are either not covered or covered at a significantly lower rate than in-network services. This can lead to unexpected expenses and financial strain.
- Balance Billing. Out-of-network providers can bill you for the difference between what your Medicare Advantage plan pays and what the provider charges, a practice known as balance billing. These extra costs really add up!
- Limited Coverage. Medicare Advantage plans often have strict limitations on out-of-network care. Non-emergency services received out-of-network may not be covered at all, or only partially covered, depending on the plan’s rules.
- Exclusions from Out-of-Pocket Maximum. Expenses incurred from out-of-network providers often do not count towards your plan’s out-of-pocket maximum. This means that even if you reach your in-network out-of-pocket limit, you could still be responsible for all your out-of-network costs.
- Emergency and Urgent Care Exceptions. Generally, Medicare Advantage plans are required to cover emergency and urgent care at in-network rates, even if the care is received out-of-network. This provides some protection in critical situations, but it’s important to understand what your plan defines as an emergency.
- Administrative Burdens. Using out-of-network providers can involve more administrative work, such as obtaining pre-approvals or referrals, and dealing with more complex billing and claims processes. This can be time-consuming and stressful.
- Potential Denial of Coverage. There is a risk that your Medicare Advantage plan may deny coverage for out-of-network services if they do not deem them medically necessary or if proper procedures (like pre-approval) were not followed. This can leave you responsible for the full cost of care.
By understanding these consequences and taking proactive steps, you can better manage your healthcare expenses and avoid unexpected costs associated with using out-of-network providers in a Medicare Advantage plan.
If the headaches of managed care networks are something you’d rather just avoid altogether, some other Medicare options provide more flexibility:
- Medigap – Medigap works with Original Medicare to cover out-of-pocket costs like copayments, coinsurance, and deductibles. Unlike Medicare Advantage, Medigap does not have networks, so you can see any doctor that accepts Medicare. However, Medigap plans do not include prescription drug coverage, so you would need to add a separate Part D plan.
- Medi-Share 65+ – Medi-Share 65+ is a health sharing program that is an alternative to traditional insurance. It works alongside Medicare to help cover medical expenses. There are no restrictions on providers, so you have the freedom to choose any doctor or specialist you want anywhere in the US. This program is a very affordable alternative for those who want more control over their own healthcare choices.
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TIP: Don’t be Fooled by $0 Premiums!
Some Medicare Advantage plans offer zero monthly premiums, which sound really great at first.
They can work out great for people in good health who rarely need medical care.
But not everyone is aware that these plans come with several potential disadvantages also including:
- higher out-of-pocket costs
- restrictive networks
- balance billing discrepancies
- prior authorization requirements
- coverage limitations
- annual plan changes
- potential denial of necessary care
So your monthly premium in a Medicare Advantage plan may be little or nothing. But in the event you do need medical care, you could face out-of-pocket costs of thousands of dollars. Even one or two medical incidents, like an ER visit or surgery, can quickly wipe out everything you thought you were saving by choosing a zero-premium Medicare Advantage plan.
So make sure you do a full cost-benefit analysis before jumping into a plan just because there is no monthly premium cost upfront.
Learn more: Don’t Buy a Zero-Premium Medicare Advantage Plan Before Reading This!
Making the Right Choice
Choosing between Original Medicare and Medicare Advantage depends on your healthcare needs, budget, and preferences.
You may want to consider the following questions to help you decide if it’s the right choice:
- Do you need additional benefits like dental, vision, or hearing coverage?
- Are your preferred doctors and hospitals in the plan’s network?
- How often do you travel, and will you need coverage outside your plan’s service area?
- What are the total costs, including premiums, deductibles, and out-of-pocket expenses?
While there are many benefits to Medicare Advantage plans, and the 2024 improvements make them even more appealing, there are also several disadvantages to consider also.
It’s a lot to take in, and we’re here to help!
Contact a Personal Benefits Manager today to discuss your healthcare needs and budget to find the best plan for your situation.
For Further Reading: How to Get Out of Medicare Advantage Nightmares|Can I Switch to Medigap with Original Medicare?|How to Buy an Electric Wheelchair or Scooter on Medicare |What is a Medicare Giveback Plan?
Whitney Kline is one of your Personal Benefits Managers at Medigap Advisors. She loves working for Medigap Advisors especially helping clients choose the right Medicare plan.