It is almost “Medicare review time” (November 15th – December 31st), that time of year when it is possible to adjust your enrollments in either Part C or Part D plans. You may be asking, “Is this the year I should choose Medicare Advantage (Part C), or should I enroll (or continue) in traditional Medicare (Parts A and B)?”
Medicare Advantage is the name given to the private insurance programs that were started with the idea of privatizing all of Medicare. There are some similarities and some bold differences between traditional Medicare and the Advantage plans. Do these differences make an Advantage plan the right choice for you?
Only you can decide, but here are some things for you to consider.
*Location – As private insurance plans, Advantage plans are controlled at the state level. What holds true in Connecticut doesn’t necessarily apply in Colorado. You have to look at the details for your individual state. In addition, you have to consider your distance to the physical locations where the services are provided. Go to the Medicare site to learn about the plans where you live.
*Structure – Traditional Medicare is a fee-for-service plan run by the government and accepted nearly everywhere. There is no “gatekeeper” aspect to traditional Medicare. You can go to any doctor that is accepting new Medicare patients.
Medicare Advantage private plans can take many forms, e.g. – HMO’s where you choose from a specific list of doctors and hospitals, PPO’s which allow use of some out-of-network providers at a higher cost, PFFS’s which will allow any doctor or hospital that will accept their terms, and SNP’s which limit membership to people with special needs. Typically, all care requires pre-approval by a physician in the plan who acts as its gatekeeper.
*Coverage – Traditional Medicare covers most specific “medically necessary” treatments. In addition, the 2010 health legislation finally added a number of preventative health measures as well.
The Medicare Advantage plans must provide coverage for the same treatments provided by traditional Medicare. However, they do not have to cover every treatment in the same way. For example, they may pay less for skilled nursing care but offer more coverage for preventative care, prescription drug coverage, and vision and dental as well.
*Costs – Here is where it gets interesting. That same tag line form the Watergate era applies here, “Follow the Money.”
For traditional Medicare, most people have already earned the Part A coverage (hospitals) and there is no additional charge. There is an additional monthly charge for Part B (doctors). Although this official charge for 2011 will be $115.40, most enrolled seniors will only pay the 2008 rate of $96.40 since the rate is locked whenever there is no cost-of-living increase for Social Security. You should also look at the costs of Medigap policies and the Medicare Drug plan (Part D) when comparing traditional Medicare to an Advantage plan that includes these benefits.
For Medicare Advantage, the rates (and their coverages) vary by plan. Because they are private programs, these plans can charge what they want. They can set their own rates, deductibles, and co-pays. They can also change these fees each year. If the plan becomes unprofitable, these plans can simply go out of business.
In addition to the premiums you will pay for an Advantage plan, traditional Medicare also pays these private firms a set amount each month per person enrolled to compensate for the coverage they provide. To help launch these programs, this amount paid has exceeded the amount paid for a person enrolled in the traditional Medicare. It was about $1,100 last year. That discrepancy is scheduled to be phased out over the next few years, so there is some concern that these plans will either raise their rates or drop extra coverages. Reading this article will provide you with some interesting insights on these developments.
*Performance – As you would expect, the performance level of these various plans can vary by location. Ask people you trust around your neighborhood to discover if there are any organizations that it may be wise to avoid. The Wikipedia article on Medicare gives a good description of the big picture and some links that may help your search for performance information. Its section on Medicare Advantage plans is especially helpful.
*Conclusions – Generally, the few rules of thumb you can follow are -
- If you live in a rural area, stick with Traditional Medicare Parts A & B. It is likely that Part C will cost you too much time and gas money.
- If you are in reasonably good health and live in an urban area, you may be able to save some money with a Medicare Advantage plan, especially one with an HMO structure that is well managed.
- If you health is deteriorating and you are facing major costs, you are probably safer with Traditional Medicare.
If you want to learn more details on what happens during this annual change period, visit this site for more details.
NB. Click below to make a comment. Even better, expand on the original article by going to wikiSenior and clicking on ‘edit’.