Medicare Advantage plans are more popular than ever. With Medicare Annual Election Period coming soon, we are expecting even more seniors to choose this type of coverage than ever before. Low- or even no-premium plans are the most popular and some plans even offer a “giveback,” a credit to your Social Security benefit, rather than charging you a premium. But as attractive as these plans may seem, it is important to understand what you are losing when enrolling in this type of private health insurance.
Advantage plans, currently available as a Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO), entice seniors to enroll by offering a lot of services beyond traditional Medicare at much lower cost – dental and vision coverage being the most popular. Prescription drug (Part D) coverage is usually included, but that can be bought separately if you have traditional Medicare. Most Advantage plans offer low- or no-cost providers, or pay visits to your primary care doctor, lab work and many preventive services. A monthly credit for over-the-counter medications and health club memberships are also popular benefits.
In exchange for these low-cost or free services, the member agrees to use only the “in-network” providers, or pay extra for out-of-network (OON). If the plan is an HMO, the cost for seeing in-network providers is extremely low, but there will be no
OON coverage and the member would pay the entire cost for OON services. If it is a PPO, the member would pay an agreed co-pay for in-network, but OON would be a higher charge and may be subject to a deductible. The OON provider also must agree to accept the insurer’s payment level.
In the HMO plans, your primary care provider becomes a gatekeeper. They are responsible for referrals to specialists, medication adherence, treatment pre-authorizations and periodic health screenings. This is part of Medicare’s goal, to move to a more preventative care model of health care. But these steps can be a source of frustration for some members. Medicare receives thousands of complaints about these gatekeeper services each year. Some insurers have been accused of using these steps as cost containment. In other words, the more difficult it is for you to receive care, the less you might actually use it.
This frustration may create the desire to return to traditional Medicare and a Medicare Supplement. Returning is allowed under different enrollment periods, especially the Annual Election Period (October 15 – December 7) and the lesser-known Advantage Enrollment Period (January – March). However, when returning to traditional Medicare, the member will have to pass health underwriting to be accepted for a Medicare Supplement plan. In other words, coverage from the supplement can be denied. With no supplemental coverage, a “Medicare-only” member would have significant out-of-pocket costs, with no maximum. A medical emergency could create catastrophic debt. Being denied a supplement plan unfortunately leaves many Medicare members feeling stuck in their Advantage plan.
While the financial cost of an Advantage plan is clearly less than that of traditional Medicare with a supplement, you may find it much more difficult to use the providers you choose, and you might be denied a Medicare Supplement plan in the future.
Randy Foulds of Foulds Health Insurance Agency is an independent broker and Medicare specialist in La Quint (license #0G69218) and can be reached at (760) 346.6565. This is provided for informational purposes only and is not intended to substitute for professional advice.