You’re about to be awash in ads for Medicare Advantage plans, the private alternative to traditional Medicare. Evaluating the options can be challenging, but there are steps you can follow to make the best decision for yourself.
Medicare’s open enrollment period runs from Oct. 15 through Dec. 7. Sometimes called “Part C,” Medicare Advantage plans are offered by Medicare-approved private companies.
More than 28 million people are enrolled in the Advantage plans, according to a data analysis from the Kaiser Family Foundation. That number represents nearly half of all eligible Medicare beneficiaries, nearly double what it was in 2007.
Celebrity-studded advertisements paint a rosy picture: low premiums, easy enrollment and alluring benefits such as vision, dental and fitness class coverage.
Medicare experts say: Look before you leap.
“All too often we encounter people who are enticed by ads promising gift cards for over-the-counter stuff and then find out they can no longer see their doctor or their home health providers,” said David Lipschutz, associate director of the nonprofit Center for Medicare Advocacy.
Here are some steps to decide whether to enroll in traditional Medicare or Medicare Advantage.
Step One: Figure out your options.
The decision you make when you become eligible at age 65 could have major health and financial consequences down the line.
Original Medicare includes Part A, which covers hospital care, and Part B for outpatient care. Part D exists for prescription drugs. Consumers can fill in gaps in their desired coverage with supplemental coverage, known as Medigap.
Part C, the Advantage plans, usually come as a bundle of A, B and D, and may offer extra benefits such as vision, hearing and dental coverage. Their branding as one-stop shops is part of what makes them attractive to many people.
In addition to traditional Medicare, the average beneficiary has access to 39 Advantage plans, KFF reports. The options vary based on a person’s geographic area. Nearly one in five Medicare Advantage enrollees are in a group plan offered by their former employers or unions.
Industry experts stress the importance of doing your research before enrolling. While it is generally easy to switch from original Medicare to Medicare Advantage plans, which don’t use medical underwriting, beneficiaries may face obstacles when switching the other way. In most states, beneficiaries can be denied Medigap policies because of pre-existing conditions, except during their enrollment windows.
Step Two: Do the math.
The route you take depends on a number of factors, including your financial risk tolerance.
Many applicants are drawn to Medicare Advantage by the promise of overall low premiums and out-of-pocket expense caps. However, the plans often have higher deductibles and copayments. Medicare Part D and Medigap plans often have higher premiums than Advantage plans but cover more healthcare services.
Be sure to check the fine print. Plans may boast coverage for extra benefits, such as hearing aids or gym memberships, but they may only cover a fraction of the total cost.
“All this is to say there is no free lunch,” said Joshua Brooker, an insurance broker with his own company, PA Health Advocates, in Lancaster, Pa.
To try to compare options, experts recommend running a cost-benefit analysis using Medicare.gov’s plan finder. Look at what you would pay in premiums to augment traditional Medicare, and deductibles in those plans, compared with your out-of-pocket limit on a Medicare Advantage plan.
Step Three: Understand the potential limitations of your coverage.
To what extent can you tolerate restrictions on your care? Your answer will likely depend on whether you are younger and relatively healthy, or whether you have health complications or chronic illness.
The majority of Medicare Advantage plans are HMOs, which have a restricted network of doctors, hospitals and health providers, and offer less flexibility than PPO plans, which offer access to out-of-network providers at higher costs.
Medicare Advantage plans often require patients to obtain a referral to see a specialist, as well as prior authorization for certain drugs or services, which generally isn’t required with traditional Medicare.
If you decide to go with Medicare Advantage, be sure to ask the provider or independent agent with whom you are working whether your doctors and prescriptions are within the network’s coverage. Be aware that coverage can change from year to year.
Robert Moehlenkamp, a 71-year-old Florida retiree, has found that plans’ listed doctors often don’t accept new patients. He said he called a dozen primary physicians before being able to book an appointment with one. “It’s kind of frustrating,” he said.
Diane Omdahl, president of Medicare consulting firm 65 Incorporated, recalled hearing from a client whose doctor dropped out of his Medicare Advantage plan’s network a week before he was scheduled to have cardiac surgery.
Step Four: Understand the limitations of agents’ recommendations.
The Centers for Medicare and Medicaid Services, commonly known as CMS, toughened its oversight of third-party marketing companies this year after a surge in consumer marketing complaints. One concern addressed by officials was that many consumers wrongly believed that agents were presenting options for a wider range of plans than those with which they actually worked.
So now third-party marketing organizations, including independent agents and brokers, must inform clients that they don’t offer all plans available in a given area. The requirement applies to television ads, printed materials and conversations with beneficiaries. In addition, marketers must advise beneficiaries to contact Medicare.gov or 1-800-Medicare for comprehensive information on plan options.
Under rates set by CMS, insurers pay agents and brokers higher commissions on average for enrolling clients in Medicare Advantage plans than for Part D plans.
Step Five: Know where to turn for help—and when to hang up.
In addition to using Medicare.gov’s plan finder, check with your State Health Insurance Assistance Program, or SHIP, which provides impartial information. These programs go by different names in different states, but they all provide free counseling to Medicare beneficiaries and their families.
If you enroll in a plan and have questions about it, call your provider. If you reach someone who isn’t particularly helpful? “One of my best free pieces of advice: Hang up and call again,” said Ms. Omdahl.
This article was originally published in The Wall Street Journal on October 14, 2022, and written by Alex Janin and Leslie Scism.
- Photos courtesy of The Wall Street Journal
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