5 Things to Understand About Medicare Advantage Plans

Over the last few years, Baby Boomers have discovered for themselves what a nightmare healthcare beyond retirement can be. There are so many different components of Medicare that many people just throw their hands in the air. Trying to navigate the Medicare system can be very frustrating. The information available online is often overwhelming and confusing. Calling a helpline is usually no more helpful than trying to figure it out yourself.

Planning your health coverage after retirement is difficult. You quickly realize that Medicare alone just isn’t enough. Most people realize that they are going to need some form of supplemental coverage. The hard part is deciding whether you want to go with a Medigap insurance plan or a Medicare Advantage Plan. 

Almost 20 million people are currently enrolled in a Medicare Advantage plan. The number of people enrolled in an Advantage plan has more than tripled since 2004. Enrollment levels vary from state to state and even from county to county. Most of these plans are either HMO (63%) or PPO (26%). 

A lot of people don’t understand how companies are able to provide these Medicare Advantage Plans. Basically, Medicare will pay the plan a certain amount (per person) toward Part A and Part B coverage. They will also contribute a separate payment for plans providing for prescription coverage under Medicare Part D.

Sounds great, right? Although there are obvious benefits to having a Medicare Advantage Plan, there are a few drawbacks. Here are 5 things you need to know before you decide on a Medicare Advantage Plan: 

1. Cost: Medicare Advantage Plans are about half the cost of a Medigap plan. If cost is a concern for you, then an Advantage plan is definitely something you want to consider. The enrollment costs are much lower than they are for a Medigap plan. However, the out of pocket costs are going to be much higher with a Medicare Advantage Plan. You really need to balance whether you’d rather pay more money upfront or more out of pocket.
2. Providers: There is a limited number of in-network hospitals and providers. You may not be able to keep your current primary doctor once you enroll in a Medicare Advantage Plan. You may also find that it’s difficult to find specialists that your plan covers. If continuity of care is important to you, then an Advantage plan may not be the best choice. Check beforehand to see if your doctor is included in the plan’s network.
3. Hospitals: Most of the hospitals included in Advantage plan networks are small or medium sized hospitals. You’ll find that a lot of the larger hospitals are not in-network. Depending on where you live, the nearest hospital covered under the plan may be quite far. It’s a good idea to see what works best for you before you enroll.
4. National Cancer Institute: Most Advantage plans provide only limited access to National Cancer Institute locations. Whether you or your spouse are already suffering from cancer or have been treated for it in the past, this will be an important consideration. Check to see what providers are in-network before making any decisions.
5. Ancillary Services: Even if a provider or hospital is in network, it’s not always so clear whether their ancillary services are covered. For example. A hospital may be in network, however, services such as heart, women’s services and rehabilitation may not be covered. Do your homework before enrolling in any Medigap or Medicare Advantage Plans.

You’ve probably already discovered that planning your healthcare for retirement and beyond is confusing. That’s probably why you’re reading this article. Sadly, there isn’t a lot of clear information available online. It seems that the more you read, the more confused you become. 

Making healthcare decisions are important. This is even more true once you retire. You no longer have a Human Resources manager who can explain the plans to you and let you know which one is best. It may also be the first time you’ll be paying out of pocket for your health insurance. You don’t know what rates are fair and which ones are taking advantage of you (pun intended.) 

If you are unsure whether a Medicare Advantage plan is a good fit for your family, don’t panic. There are resources you can access to answer your questions. You can call a helpline and ask any questions you may have. Talk to your doctor and see if he has any suggestions. Make sure you check to see if your current providers are in-network. Most doctor’s offices can fax you a list of participating Medicare supplemental plans.