Choosing a Medicare Advantage plan can be a daunting task. While most of the news coverage focuses on ACA enrollment, Medicare recipients also have decisions to make. With the December 7 deadline fast approaching, plan members often stress about whether they’re choosing the right plan for the upcoming plan year. Medicare Advantage contracts are year-long commitments in most cases. Unfortunately, should health circumstances change, the plan may not adequately cover a new, unforeseen conditions. While not all problems can be prevented, knowing some key information will mitigate the effects.

Medicare Advantage members still have Medicare

Contrary to popular belief, people using Medicare Advantage still have Medicare. The agreement with Medicare Advantage is a one-year contract with an insurance company where the insured agrees to operate under the rules of the plan. The insurer signs an agreement with Medicare where Medicare gives the insurer a fixed amount for taking care of the health needs of the insured. Because of the payment from Medicare, some of these Plans will have a $0 premium for the insured. Regarding premiums, Medicare Advantage plans will usually cost less than purchasing a Medigap plan and a Prescription Drug Plan (PDP) under Original Medicare.

Choose the best plan that’s affordable and available

Medicare Advantage comes in several forms, although the overwhelming majority of plans are health maintenance organizations (HMOs) or preferred provider organizations (PPOs). Both have doctor and hospital networks.

With HMOs, members are limited to the plan’s network except in emergencies.

Plan members are also not allowed to see specialists or go to hospitals in non-emergency situations without approval from a primary care provider. PPOs allow out-of-network doctor and hospital visits at a higher fee. PPO members also don’t have to gain permission to see a specialist or visit a hospital.

If a plan is both affordable and available, it’s usually best to avoid HMOs.

If sick, people don’t want the stress of figuring out which hospital they can visit or have to get another physician to grant permission. Confusion about network statuses can mean the insured is stuck paying the entire bill for a physician or hospital visits. Unfortunately for plan members, the “I didn’t know” defense rarely works.

In most cases, people are stuck with the plan’s Rx coverage

Most recipients who choose Medicare Advantage will choose a Medicare Advantage Prescription Drug Plan (MA-PD) plan. While medical only (MA) plans are available, these plans are only feasible for veterans eligible for VA prescription coverage or those who choose to waive prescription coverage altogether. Most people on Medicare take the prescription coverage as most who opt for Medicare’s drug coverage at a later time face hefty, lifetime fines.

Further, good drug coverage must be a consideration when choosing a plan. Except with select Private Fee-For-Service (PFFS) plans, Medicare disallows people from having both a Medicare Advantage plan and a stand-alone PDP. Unfortunately for those who want separate plans, PFFS plans are not available in most areas. Like with PDPs, members should confirm that the MA-PD covers all their drugs and the corresponding copays and coinsurance. Most rules that apply to standalone PDPs, also apply with MA-PD, including the dreaded “donut hole.”

Doctor relationships with networks are unpredictable

As previously mentioned, HMO members must use physicians in the network. Unfortunately, this can be tricky for these reasons:

  • Physicians come and go from networks frequently, including during the middle of plan years.
  • A physician can be in-network with one insurance company plan, and be out-of-network with a different plan from the same insurance company.
  • When one is at an in-network hospital, an out-of-network physician can be assigned to help with their care. In those cases, out-of-network costs or full costs would apply to the insured.
  • Out-of-network physicians have no obligation to accept a patient’s MA-PD coverage

Any of these scenarios can be quite frustrating for a patient.

While no solution eliminates all potential problems, most issues can be mitigated by choosing a PPO.

With all Medicare Advantage plans, knowing the rules prevents many potential problems down the road. Plan members should at least know that they still have Medicare and the commitment is only one year. Members should also know they have the right to change plans anytime during open enrollment, October 15-December 7. This includes the right to choose a different plan within the enrollment period if they have second thoughts about their original choice. Medicare Advantage can mean some costly mistakes when members don’t understand the rules. But if they understand the guidelines and pitfalls, they’ll have the knowledge to turn plans into a true advantage.

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