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What is Medicare Part C (Medicare Advantage)?
The Medicare program, which is a federal program that helps senior citizens and certain other individuals pay for health care, is divided into four parts; Part A, Part B, Part C, and Part D. Part C, sometimes called "MA" (Medicare Advantage) is an alternative to Parts A and B. If you join a Medicare Advantage plan, the plan, offered by private companies approved by Medicare, will provide all of your Part A (Hospital Insurance) and Part B (Medical Insurance) coverage. In all types of Medicare Advantage plans, you're always covered for emergency and urgent care.
Caution: How your Part A (Hospital) and Part B (Medical) insurance pays under your Medicare Advantage plan (i.e. deductibles, copayments, coinsurance) is set by the plan each year and may cost you more or less than what you would have paid under the Original Medicare program. Starting in 2011, Medicare Advantage plans can't charge you more than Original Medicare for certain services like chemotherapy, dialysis, and skilled nursing facility care. Medicare Advantage plans must cover all of the services that Original Medicare covers except hospice care. Original Medicare covers hospice care even if you're in a Medicare Advantage Plan. Medicare Advantage Plans aren't supplemental coverage.
TIP: If you're in a Medicare plan, review the Evidence of Coverage (EOC) and Annual Notice of Change (ANOC) your plan sends you each fall. The EOC gives you details about what the plan covers, how much you pay, and more. The ANOC includes any changes in coverage, costs, or service area that will be effective in January. If you don't get an EOC or ANOC, contact your plan. You should have a Member Services phone number on the back of your plan's ID card.
Medicare Advantage plans may offer extra coverage, such as vision, hearing, dental, and/or health and wellness programs. Most include Prescription Drug coverage (Part D). In addition to your Part B premium, you usually pay one monthly premium for the services included.
Medicare pays a fixed amount for your care every month to the companies offering Medicare Advantage plans. These companies must follow rules set by Medicare. However, each Medicare Advantage Plan can charge different out-of-pocket costs and have different rules for how you get services (like whether you need a referral to see a specialist or if you have to go to only doctors, facilities, or suppliers that belong to the plan for non-emergency and non-urgent care). These rules can change each year.
NEW FOR 2011:
- Medicare Advantage plans can't charge you more than Original Medicare for certain services like chemotherapy, dialysis, and skilled nursing facility care;
- There will be an annual cap on how much you pay for Part A and Part B services during the year. For 2011, this cap is set at $6,700. This annual maximum can be different between Medicare Advantage plans;
- If you join a clinical research study, your costs may be lower and some costs may be covered by your plan. Call your plan for more information.
When Medicare was created in 1965 (original Medicare), it provided only two parts; Part A and Part B. Generally speaking, Part A is free to eligible recipients and helps pay for in-hospital care. Part B is optional and helps pay for regular medical care (e.g., doctor's bills, x-rays, lab tests). Individuals who choose to enroll in Part B must pay a premium, a deductible, and co-payments or coinsurance.
Original Medicare is a private fee-for-service (PFFS) plan, which means that beneficiaries can choose any doctor or specialist who accepts Medicare, and is available nationwide. Original Medicare is administered directly by the federal government, although claims and payments flow through private health insurance companies that act as intermediaries.
In 1997, Medicare Part C (originally called Medicare + Choice) became available to persons who are eligible for Part A and enrolled in Part B. Part C is called Medicare Advantage plans or "MA Plans."
Insurance companies can offer Medicare recipients benefits that are not covered under original Medicare, although a premium may be charged for the extra coverage. Further, HMOs and PPOs can typically offer Medicare recipients benefits at a lower cost because enrollees can only get covered health care through the plan's network of providers, allowing the insurance company to "manage" the costs. The result is that many Medicare beneficiaries (some plans are not available in all areas) have a wider array of health plan options from which they can choose, allowing them to obtain the best coverage they can get at a cost they can afford.
In 2003, under the Medicare Prescription Drug, Improvement, and Modernization Act, Medicare Advantage became the new name for Medicare + Choice plans, and certain rules were changed to give Part C enrollees better benefits and lower costs. The law also created Part D, prescription drug coverage.
Tip: A toll-free number 1-800-MEDICARE (1-800-633-4227) and a website (www.medicare.gov) are available to answer questions you may have about your Medicare benefits and direct you to publications where you can find more information.
Tip: The federal government now offers Medicare benefits through PPOs (not to be confused with Medicare Advantage PPOs) as well as through PFFSs.
Enrolling in a Medicare Advantage plan
In order to enroll in a Medicare Advantage plan, you must be entitled to Part A and enrolled in Part B, and you can only enroll in a plan that is available in your area. If you're new to Medicare, you can generally enroll when you first become eligible. This is a seven-month period called your Initial Coverage Enrollment Period (ICEP). Your ICEP begins three months before your birthday month (if your birthday falls on the first of the month, your birthday month is the previous month), includes your birthday month, and the three months after your birthday month.
Caution: Once you're enrolled in a Medicare Advantage plan, you can generally make changes to your plan only during certain time periods . One enrollment period is called the Annual Coordinated Election Period (AEP) and occurs from October 15 to December 7 of each year. During this time period, anyone with Medicare can select a new Medicare health plan and/or a Medicare prescription drug plan or make other changes to their coverage. For more information, go to Medicare Enrollment Periods or call Medicare at 1-800-MEDICARE (1-800-633-4227).
Effective January 1, 2011, there will no longer be an Open Enrollment Period (OEP). In its place will be the Medicare Advantage Disenrollment Period (MADP). The MADP runs from January 1 through February 14. During the MADP, you can disenroll from your Medicare Advantage plan and return to Original Medicare. If you disenroll from your Medicare Advantage plan, you may also enroll in a Part D Prescription Drug plan whether or not your Medicare Advantage plan included prescription drug coverage. You may also apply for a Medicare Supplement (Medigap) policy, although your application may not be guaranteed issue if you are no longer in your Medigap Open Enrollment period (the first six months of your Part B effective date and attainment of age 65).
There are several situations that allow you to enroll or change plans called a Special Election Period (SEP). The most common is losing Employer or Union Group Health coverage. For more information about when you can join or switch Medicare plans, go to Medicare Enrollment Periods or call Medicare at 1-800-633-4227.
Tip: You generally can't join a Medicare Advantage plan if you have end-stage renal disease.
Leaving a Medicare Advantage plan
Medicare Advantage contracts operate on a calendar year basis. Generally, you are only able to leave a Medicare Advantage plan during the Annual Coordinated Election Period (AEP) or the Medicare Advantage Disenrollment Period (MADP). You may also qualify to leave your Medicare Advantage plan if you experience a Special Election Period (SEP). Look at the situations that may qualify you for a Special Election Period (SEP) by clicking here.
Why choose a Medicare Advantage plan?
When you enroll in any Medicare Advantage plan, you will still get all original Medicare covered services, but you may also obtain extra benefits and services not offered by original Medicare, and/or you may be able to reduce your out-of-pocket costs. The extra benefits and services you receive and/or the amount of money you save will depend on which Medicare Advantage plan you choose.
Caution: Keep in mind, though, that because private insurance companies offer Medicare Advantage plans, they can change the extra benefits provided by the plan and decide (on an annual basis) whether they will continue participating in Medicare. Health care providers can also join or leave the plan at any time.
Caution: Depending on the Medicare Advantage plan you choose, you may decide to cancel an existing Medigap policy because you will no longer be able to use the extra coverage the policy provides. However, you should be aware that if you do so, you may be unable to get it back except in certain situations. If you've just become eligible for Medicare or if it is the first time you've enrolled in a Medicare Advantage plan, you may have special Medigap protections during your first year of coverage.
Different Types of Medicare Advantage Plans:
- Health Maintenance Organization (HMO) Plans
- Preferred Provider Organization (PPO) Plans
- Private Fee-for-Service (PFFS) Plans
- Special Needs Plans (SNP)
Other, less common types of Medicare Advantage Plans include:
- HMO Point-of-Service (POS) Plans -- An HMO plan that may allow you to get some services out-of-network for a higher cost.
- Medical Savings Account (MSA) Plans -- A plan that combines a high deductible health plan with a bank account.
Medicare Advantage PFFS Plans
These plans are generally the most flexible and most costly. They allow you to see any Medicare-approved doctor or hospital who accepts the plan's payment terms and agrees to treat you. Not all providers will. If you join a PFFS plan that has a network, you can also see any of the network providers who have agreed to always treat plan members.
Tip: If you enroll in a Medicare Advantage private fee-for-service plan, you don't need a Medigap policy, and it generally isn't legal for any company to sell you one. However, you can keep an existing Medigap policy if you so choose, but your Medigap policy cannot reimburse you for any out-of-pocket costs you have under your Medicare Advantage plan.
Medicare Advantage HMOs
You may save the most money on your health costs by joining a Medicare Advantage HMO. However, your choice of health care providers is more limited than with other options--you're generally covered only when you see doctors and specialists, or go to hospitals that are part of the plan's network of providers and within the plan's service area. When you choose a Medicare Advantage HMO, you'll need to choose a primary care physician who will oversee your care and refer you to specialists when necessary.
Medicare Advantage PPOs
With Medicare Advantage PPOs, you will generally only see health care providers within the plan's network, but, unlike Medicare Advantage HMO plans, you can choose doctors and services outside the PPO network for a fee, and you do not need referrals to see a specialist.
Medicare Advantage MSAs
MSA Plans combine a high deductible Medicare Advantage Plan and a bank account. The plan deposits money from Medicare into the account. You can use the money in this account to pay for your health care costs, but only Medicare-covered expenses count toward your deductible. The amount deposited is usually less than your deductible amount so you generally will have to pay out-of-pocket before your coverage begins. For more information about MSA, please look up "Your Guide to Medicare Medical Savings Account Plans."
Medicare Advantage SNP
A special type of Medicare Advantage Plan that provides more focused and specialized health care for specific groups of people, such as those who have both Medicare and Medicaid, who reside in a nursing home, or have certain chronic medical conditions.
What you Pay in a Medicare Advantage Plan
Your out-of-pocket costs depend on:
- Whether the Plan charges a monthly premium in addition to your Part B premium
- Whether the Plan pays any of the monthly Part B premium. Some plans offer this option, usually for an extra cost
- Whether the plan has a yearly deductible or any additional deductibles
- How much you pay for each visit or service (copayments)
- The type of health care services you need and how often you get them
- Whether you follow the Plan's rules, like using network providers
- Whether you need extra benefits and if the plan charges for it
- The plan's yearly limit on your out-of-pocket costs for all medical services
Choosing the right Medicare Advantage plan
There's a lot to consider when deciding which Medicare option is right for you. Here are some questions to ask during the decision-making process:
- How much is the premium?
- Will you need to satisfy a deductible or pay copayment or coinsurance costs?
- Does the plan cover the extra benefits or services you need (such as coverage for vision, hearing, dental, or health and wellness programs)?
- Does the plan offer prescription drug coverage (most Medicare Advantage plans do)?
- Are you satisfied with your care? Medicare now ranks Medicare Health plans from one to five stars.
- Do the health care providers you normally see participate in the plan?
- If your doctor leaves the plan, are you okay with changing doctors?
- Do you travel out of your service area a lot? If so, keep in mind that Medicare Advantage plans are only required to cover you for emergency care and urgently needed care outside your plan's service area.
- Are you okay with the fact that the plan's benefits and costs generally change each year?
What if your Medicare Advantage plan leaves the Medicare program?
You still have Medicare coverage. You can return to original Medicare or join another Medicare Advantage plan if one is available where you live. Your options will be listed in the notification letter you are sent when your plan leaves the Medicare program.
How does the Affordable Care Act impact Medicare Advantage plans?
Today, Medicare pays Medicare Advantage insurance companies over $1,000 more per person on aver than Original Medicare. These additional payments are paid for in part by increased premiums by all Medicare beneficiaries, including the 77% of seniors not enrolled in a Medicare Advantage plan.
The new law levels the playing field by gradually eliminating Medicare Advantage overpayments to insurance companies.
If you are in a Medicare Advantage plan, you will still receive guaranteed Medicare benefits.
Beginning in 2014, the new law protects Medicare Advantage members by taking strong steps to ensure that at least 85% of every dollar these plans receive is spent on health care, rather than administrative costs and insurance company profits.
Consumer Protections and Appeal Rights under Medicare Part C
Under Medicare Part C, consumers are offered several protections designed to enhance the quality of care they receive, including the right to information, the right to participate in treatment decisions, the right to get emergency services, and the right to file complaints. In addition, your state insurance laws may provide additional consumer protections.
You have the right to appeal any decision about your Medicare-covered services, whether you are enrolled in original Medicare or a Medicare Advantage plan. You can file an appeal if your plan does not pay for or provide a service or item you think should be covered or provided. The appeal procedure may vary, depending on the type of Medicare plan you have. If you are enrolled in original Medicare, you can find your appeal rights on the back of the Explanation of Medicare Benefits or Medicare Summary Notice you received. If you are enrolled in a Medicare Advantage plan, the plan must give you written notification of your appeal rights; this will generally be included in your Medicare enrollment materials.
Medicare beneficiaries also have the right to a fast-track appeals process. If you believe that your health plan is ending its services too soon, you can ask for a quick review of your case conducted by independent doctors. You may have additional rights if you are hospitalized, in a skilled nursing facility or if your home health care ends.
If you have any questions about consumer protections or appeal rights, call (800) Medicare or visit the Medicare website. You can also click here to download the Official Government Booklet entitled Your Medicare Rights and Protections.
Citation: Medicare & You 2011; medicare.gov; cms.gov |
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