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Medicare Advantage – What Is It & Upcoming Changes

April 06
13:31 2018

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Healthcare coverage is expensive. If you are fortunate enough to have an employer provided plan, you may still find it necessary to pay several hundred dollars a month for family coverage. I know some people who were paying over $360 a month for family coverage for an employer provided healthcare plan and then still had to pay high deductibles (one for themselves and one for the rest of the family) and once deductibles were met, not everything was covered. Is it any wonder why so many Americans found it too costly to pay into healthcare, even with an employer provided plan?

But, what happens when you reach 65 and retire? Some companies will allow you to keep your coverage but the costs may go up. Otherwise, you are left with buying your own individual coverage, finding some group you can join or relying on Medicare.

Medicare Parts A & B are what most seniors end up taking, especially those living on a limited fixed income.

Part A, referred to as ‘premium-free Part A gives you some hospital coverage, according to Medicare’s website, Part A coverage is:

You pay:

  • $1,340 deductible for each benefit period
  • Days 1-60: $0 coinsurance for each benefit period
  • Days 61-90: $335 coinsurance per day of each benefit period
  • Days 91 and beyond: $670 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime)
  • Beyond lifetime reserve days: all costs

Part B currently costs $134 a month. It pays for general doctor visits and some preventive care and vaccines, but there is a deductible that must be reached first.

There are more Medicare parts, but they are sold through insurance companies for additional costs but will help with prescriptions and other expenses.

We hear so much about Medicare Advantage on television and in the junk mail we receive but what is it?

According to Medicare:

“You can get your Medicare benefits through Original Medicare, or a Medicare Advantage Plan (like an HMO or PPO). If you have Original Medicare, the government pays for Medicare benefits when you get them. Medicare Advantage Plans, sometimes called ‘Part C’ or ‘MA Plans,’ are offered by private companies approved by Medicare. Medicare pays these companies to cover your Medicare benefits.”

“If you join a Medicare Advantage Plan, the plan will provide all of your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage. This is different than a Medicare Supplement Insurance (Medigap) policy.”

Under Medicare Advantage, there are 6 major types. They are:

  • Health Maintenance Organization (HMO) plans – Like other HMO plans, you can only see the approved doctors or be treated at approved hospitals or clinics that in the HMO network. If you need to get any tests done or see a specialist, you need your primary doctor’s referral first.
  • Preferred Provider Organization (PPO) plans – They often operate similar to an HMO with being limited to using doctors, clinics and hospitals within the plan network. They frequently but not always, have a lower out of pocket cost for in network treatment, but higher costs for out of network treatment.
  • Private Fee-For-Service (PFFS) plans – In many ways, these plans are similar to Original Medicare. You can see any doctor and go to any clinic or hospital. The difference is, this plan will determine, based upon their own guidelines, what they will pay the doctor clinic or hospital and how much you will have to pay.
  • Special Need Plans (SNPs) – These plans are designed for those with chronic medical conditions, are in a nursing home or have other specialized healthcare needs.
  • HMO Point-of-Service (HMOPOS) plans – Basically, these are HMO plans that will MAY allow more out of network treatment but there is a higher copay and/or coinsurance.
  • Medical Savings Account (MAS) plans – These plans work like a flexible spending account where both you and Medicare put money into specific bank account which is used to pay for medical treatment. They usually have a higher deductible and the coverage may be limited.

If you are contemplating a Medicare Advantage plan, you may want to be aware of some changes that are supposed to go into effect in 2019, per this report:

“Air conditioners for people with asthma, healthy groceries, rides to medical appointments and home-delivered meals may be among the new benefits added to Medicare Advantage coverage when new federal rules take effect next year.”

“On Monday, the Centers for Medicare & Medicaid Services (CMS) expanded how it defines the ‘primarily health-related’ benefits that insurers are allowed to include in their Medicare Advantage policies. And insurers would include these extras on top of providing the benefits traditional Medicare offers.”

“‘Medicare Advantage beneficiaries will have more supplemental benefits making it easier for them to lead healthier, more independent lives,’ said CMS Administrator Seema Verma.”

The bottom line is that it is still expensive to try to live longer but given the alternative, perhaps some of you may want to look into a Medicare Advantage plan but be warned that they are not for everyone, depending on their needs and finances.

 

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