Medicare Advantage Plans
In the year 2020 it is estimated that almost all (99%) percent of seniors will have the availability of some sort of Medicare Advantage plan (as called Medicare Part C). The average senior will have access to 39 plans. But what are Medicare Advantage plans, and how are they different than Original Medicare?
Original Medicare is a fee for service plan, when you use a medical service, such as an ambulance, Medicare will be billed for that service. Medicare will pay their portion of the bill and then send the bill to your Medicare Supplement Insurance to pay some or all or the remaining bill (depending on what level of coverage you have purchased). What? You don’t have any Medicare Supplement Insurance, then you will be billed for the remainder.
Part C Medicare Advantage plans are managed healthcare, that is they use private insurance companies to provide your Medicare benefits. The insurers must provide at a minimum the same medical services as Medicare, but they can provide extra benefits too, so long as Medicare approves them. The insurance companies are paid monthly to provide services (they are capitated). The companies control cost by using that monthly fee to negotiate for hospital services (Part A), medical services (Part B) and often provide prescription drug coverage (Part D) with networks of providers. In most plans you will have a Primary Care Doctor and will use the specialist and services provided by the networks she/he is associated with.
If you get down to the two main differences between Original Medicare and Medicare Part C, it is that Original Medicare provides you with the freedom to see any doctor that will accept Medicare, while Medicare Part C usually provides financial benefits, like a cap on how much money you will pay for hospital and medical expenses in a given year (called Maximum Out of Pocket Expense).
So which plan is best? That depends on the individual, but most of the time clients decide based on how comfortable they are with either Original Fee for Service Medicare, or Part C Managed Care Advantage Plans. But the percentage of people on Advantage Plans keeps going up, year after year, so it looks like people are getting more comfortable with them.
Have questions about Advantage Plans or want to know how to include them in your healthcare? Call Jim at (714) 418-4040 or click here to schedule a consultation online.