Medicare Advantage Plans are part of Medicare Part C. The other component of Medicare Part C is Medicare Supplement Plans, which is covered elsewhere. They sound similar but they are quite different!
Medicare Advantage Plans are designed to cover the same health claims that are covered by Medicare Parts A & B, but in a different manner, (insurance companies rather than the government). This coverage is not as expensive as Medicare Supplement Plans, and it addresses the desired purpose of filling in the gaps in coverage created because Parts A & B only cover 80% of the claim costs.
In addition, it offers more services generally. However, Medicare Advantage Plans have more deductibles, co-pays and limitations, and should not be confused with Medicare Supplement Plans.
To understand Medicare Advantage Plans, you need to understand that they are the most current iteration of Medicare Coverages. With these coverages, Insurance Companies take it upon themselves to replace Original Medicare Parts A & B, and give more types of coverage, but use their underwriting techniques to limit costs. In addition to the underwriting techniques of installing deductibles, maximums, co-pays and drug formularies, these coverages are sold by state, so they are much more like an HMO and they are not necessarily available or portable to all states.
Medicare Advantage Plans Advantages:
Cost: The advantage of Medicare Advantage Plans over Medicare Supplement Plans is cost. They are generally HMO type plans where the insured does not have as much choice of doctors or hospitals. This is why they are cheaper. Some insurers do offer Medicare Advantage PPO plans which include some greater choice of providers.
More Flexible Coverage: When combined with Medicare Parts A & B, this coverage does generally provide more types of coverage than a Medicare Supplement Plan. For example, this may cover dental, vision, and prescription drugs which are not covered under Medicare Supplement Plans.
Insurance Company Sponsored: Medicare Advantage Plans are designed to encompass the coverages offered under Medicare Parts A & B, but do it in a more 21stcentury manner. The trend in medical insurance is toward the Medicare Advantage Plans where each procedure, each drug, each treatment, each specialty, etc., is covered by a separate coverage limit and some form of deductible or co-pay. This is why generally, you hear more advertising about Medicare Advantage Plans than Medicare Supplement Insurance.
Medicare Supplement Plans Disadvantages:
Complexity: Not only are more types of coverage available like: Vision, Dental and Drug Coverages, each coverage has a narrower definition of coverage. For example, a Medicare Supplement Plan follows original Medicare and broadly covers most all medical problems. Medicare Advantage Plans make the buyer understand more about the coverage, deductibles and co-pays per coverage type, and lifetime maximums and covered and uncovered drugs. A buyer needs to understand all these complexities, but this option can be less expensive.
Drugs: Drug Coverage is covered under Medicare Advantage Insurance. This is a big deal, but Medicare Advantage Plans have different prices and different coverages (including no coverage) for each type of drug (these are called formularies), so you need to make certain the Medicare Advantage Plan you chose covers your required drugs. Medicare Part D (Used with the Medicare Supplement Plans) does cover most all drugs.
Not Widely Accepted: With Medicare Advantage Insurance you must try to use only the doctors and hospitals included in your plan. If you go out-of-plan, you can find that your coverage is dramatically reduced. If you find yourself in state where your plan is not available, you can still get Emergency service, but it is quite limited in scope.
EINSURANCE recommends that it is best, as a new user of Medicare Coverages, to start with Medicare Supplement Insurance and Medicare Part D (Drug Coverage) and then transfer to Medicare Advantage Plans once you are fully aware of all your medical issues and what coverages and drugs are most important to you. You can change your selection each year during the open enrollment period (also called, OEP).
Disclaimer: EINSURANCE.com content is intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you in your current and future situations. Everyone is different!
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