The Nationwide Retirement Institute consumer survey shows that 37% of people do not know what Medicare Advantage (MA) is. Even from the 63% of participants who replied positively, only 27% strongly agree. They agree with the statement that they know what MA is. This shows how few people know about Medicare Part C.
This is coupled with the fact that there is plenty of misinformation out there about Medicare Advantage. This tends to lead to various false notions. Let’s try and unveil the truth about MA that such false notions have concealed to help people understand these health insurance plans better.
Medicare Part C – Expectation vs. Reality
Let’s go over some of the common assumptions people have about Medicare Advantage. We can then see how far away or close to reality they are:
▪ Expectation – I will have to get Prescription Drug Coverage separately.
Reality – Most MA plans include prescription drug coverage. As highlighted by the Kaiser Family Foundation, 90% of all Medicare Advantage plans offered in 2020 included prescription drug coverage. And 89% of Medicare Advantage enrollees were benefiting from them.
▪ Expectation – Medicare Advantage plans have high premiums.
Reality – Premiums for MA plans have steadily declines for the past few years. Between 2019 and 2020 only, the average Medicare Advantage premiums reduced by $4 per month. In 2020, Medicare Advantage enrollees were paying an average of $20 per month for HMO plans. They were paying about $32 for local PPO plans, and $47 for regional PPO plans. All these plans also included prescription drug coverage.
Research shows that about two-thirds of Medicare Advantage enrollees have HMO plans. This means they were only paying an average of $20 per month.
▪ Expectation – Medicare Advantage plans do not include vision, hearing, or dental coverage.
Reality –A vast majority of MA plans offer extra or supplemental benefits that you don’t get with Original Medicare. And these include vision, hearing, and dental benefits. According to Kaiser Family Foundation 2020 Medicare Advantage Report, 79% of Medicare Advantage enrollees were in plans that provided coverage for eye exams or glasses, 77% had telehealth services coverage, 74% had dental care covered, and 72% received coverage for hearing aids. The report further highlighted that 74% of Medicare Part C enrollees also received some fitness benefits with their MA plans.
▪ Expectation – I will continue to pay out of pocket for various services throughout the year, just like with the Original Medicare.
Reality – Medicare Advantage plans have a yearly limit for what you pay out of pocket for Medicare Part A and B services. Once you reach that limit, you won’t have to pay anything for the covered services for the remaining enrollment year.
▪ Expectation – Once you sign up for a Medicare Advantage plan, you’re stuck with it for life
Reality – You can change your MA plan or even move back to Original Medicare during the Annual Election Period (AEP). The AEP period runs from October 15 to December 7 every year. The changes made during this period are applied to your plan from January 1 of the following year. You can also switch to a different MA plan or return to Original Medicare during the annual MA Open Enrollment Period that runs from January 1 to March 31.
You may also make changes to your Medicare Part C plan during a Special Enrollment Period (SEP). This is only if you qualify for it. The time duration and conditions for SEP vary from case to case.
▪ Expectation – People with pre-existing health conditions are denied Medicare Advantage.
Reality – Several Medicare Advantage plans provide disease management and care coordination. A change made at the beginning of 2021 has also made it possible for Medicare-eligible end-stage renal disease patients to enroll in MA plans.
▪ Expectation – I will be forced to see doctors from the provider’s network, which is very small.
Reality – This varies across different Medicare Advantage plans. While most Advantage plans have specific networks of doctors, many allow you to see a doctor or get services that are out of network under certain conditions. These typically include getting advanced approvals and higher coinsurance or copays.
▪ Expectation – I can use my Medigap plan to pay for Medicare Advantage out-of-pocket costs
Reality – Even though Medicare Advantage is an alternative to Original Medicare, you can’t use your Medigap plan to cover your out-of-pocket costs for it, just like you do with traditional Medicare. This is not only against the terms of the plan. It also not possible because Medicare Advantage offers coverage for services that Original Medicare or Medigap doesn’t.
The Final Word
Medicare Advantage plans have got a bad rap, primarily due to misinformation about these plans. This caused mistrust towards the private insurance providers. However, most (if not all) Medicare Part C plans offer much better coverages than people presume. It wouldn’t be wrong to say that Medicare Advantage plans are a lot better in reality than they are believed or expected to be. Contact us to find out more details about Medicare Advantage Plans in your area.