If you have a Medicare Advantage plan, then you know that the private version of Medicare combines all the benefits of Parts A and B (Original Medicare) with extras that make your plan worthwhile.
But you might not be thrilled with the plan itself.
Maybe it doesn’t cover the doctors you like, the network limits are too tight or you can’t find a pharmacy that takes your coverage.
The tradeoff for all the perks of Medicare Advantage is that sometimes, network limitations and other plan rules make these policies seem restrictive. After a few months with your Advantage plan, you might be ready to make a switch.
Fortunately, you don’t have to wait until the Medicare Open Enrollment Period in the fall to make a change to your Medicare Advantage plan. As an Advantage enrollee, you’ve got an extra period to change your coverage. It’s called the Medicare Advantage Open Enrollment period.
That ends this month, on March 31.
We go over all the ins and outs of this special enrollment period in another article.
Here, we want to talk about what you should look for in your next Advantage plan. Because what works for someone else might not work for you. It doesn’t mean all Medicare Advantage plans are bad. It just means you haven’t found the one that fits your needs.
Here’s what to consider when buying Medicare Advantage.
Cost should be the first thing you look at when evaluating a Medicare Advantage plan. But we don’t just mean the monthly premium. Instead, consider all the costs of a health plan, including your out-of-pocket responsibilities and how much the plan actually covers.
Start by taking stock of your own healthcare needs. Do you have a chronic medical condition that requires frequent trips to the doctor? You’ll need a plan with lower cost-sharing. That means lower deductibles, copayments and coinsurance when you see a provider. Consider:
- The monthly premium
- Coinsurance and copayment rates
- Any deductibles for medical care, hospital care and prescription drugs
In 2020, the average cost of a Medicare Advantage is just under $30 a month across the country. It varies widely based on where you live, though.
For instance, the average cost of a Florida Medicare Advantage plan is about $8 a month while people living in Minnesota have a monthly average of $91. These rate averages come directly from the Centers for Medicare and Medicaid Services, which oversees Medicare and keeps tabs on the private plans, too.
Still, the CMS also reported that nearly every Medicare Advantage member in the country would have access to at least one plan that doesn’t have a monthly premium. You’ll always pay your Part B premium (and a premium for Part A, if you have one), but costs vary from there if you have Medicare Advantage.
That’s why it’s important to shop carefully. A monthly premium doesn’t mean much when it comes to coverage. Great plans might cost nothing; mediocre ones might have a monthly cost.
How can Medicare Advantage plans cost nothing extra per month? Isn’t a $0 premium a little suspicious? Short answer: No.
The longer answer involves several pieces of legislation over the years that boil down to this: Medicare pays Medicare Advantage plans to manage Parts A and B along with drug coverage for the plans that offer it. For a more thorough rundown of how Advantage plans get federal funding, check out this fact sheet from the Kaiser Family Foundation.
Private plans can offer a bevy of benefits without charging their customers an extra premium because they get paid by the government to manage benefits more efficiently.
Keep in mind, too, that Medicare Advantage plans come with an annual out-of-pocket maximum. That’s the max you’ll have to pay out of pocket for the year on your medical care. (Original Medicare doesn’t have such a cap.)
The federal government sets an upper limit on these caps. In 2020, that limit is $6,700. Some plans have lower caps, and some plans set different caps for in-network vs. out-of-network providers. This is another thing to check when you’re reading plan details.
Original Medicare covers the same set of benefits. Medicare Advantage plans, as you might know if you have one, do not. By law, all Medicare Advantage plans cover at least the same benefits as Parts A and B. Beyond that, private plans can offer different coverage. You may find plans that cover care and services like:
- Prescription drugs
- Dental care
- Vision benefits
- Hearing aids and exams
- Gym memberships
- Meal delivery
- Transportation to doctor’s visits
Private plans compete for business, so you can find some good deals and good coverage if you take the time to dig.
Nationwide, there are over 4,600 Medicare Advantage plans available — though access to those plans depends on where you live, of course. There are 372 Medicare Advantage plans in California in 2020, for example, but only 16 in South Dakota.
Don’t settle for a plan because an agent tells you it’s the best. Buy a Medicare Advantage plan that covers the things you need. If you don’t think you’ll go to the gym, get a plan that has better coverage for prescriptions over one with a gym membership.
Likewise, don’t forget to check out a plan’s section on drug coverage. If you take regular medications, you need a plan that covers them. Many Medicare Advantage plans include drug coverage as an added benefit, but coverage varies. Check the plan’s formulary (its list of covered drugs) to make sure it has what you need.
Bottom line? Identify the things you care most about first. Once you find plans that cover those benefits, you can consider any extras like home carpet shampooing, cooking classes and home improvements to make life easier.
Networks are a blessing and a curse for Medicare Advantage. On one hand, they keep costs down for members. Insurance companies can offer better deals if they negotiate rates with a limited network of providers. On the other hand, you won’t always find your preferred providers in an otherwise great plan.
Insurers typically let you look up providers ahead of time using their website. Use these tools to make sure the plan you like covers the people and hospitals you want. For example, if you see a certain endocrinologist for managing your diabetes, check with the insurance company to see if he’s covered by the plan.
Networks can be especially limited in rural areas or places without a lot of specialists. But it’s important to buy a Medicare Advantage plan that covers the people and places you like — or as close as you can get based on where you live.
As we said earlier, one tradeoff for better coverage and lower out-of-pocket costs with Medicare Advantage is that networks exist. (Original Medicare doesn’t have networks.) You’ll have to assess whether this tradeoff makes sense for you, assuming you can’t find a plan that covers all of your providers.
Finally, check a plan’s Star Rating to see how it performs. The CMS issues annual ratings for Medicare Advantage plans to help consumers track performance in categories like managing chronic conditions, member complaints and customer service.
Star Ratings can help you identify which plans perform well, but they don’t always tell the whole story. Consider the other factors we’ve mentioned when comparing options. A 4-star plan might sound great, but it also needs to cover the things you care about and work for your budget. The same advice applies to recommendations from friends and family. What works for them might not for you, so tread carefully with personal recommendations.
As a side note, you can switch from one Medicare Advantage plan to a 5-star plan in your area once per calendar year. There’s a 5-star Enrollment Period that runs from December 8 through November 30 each year. During this time, you can make a one-time switch to a 5-star plan. Ratings come out in October, so check with Medicare to learn more about 5-star plans in your area.
Ready to Switch?
The Medicare Advantage Open Enrollment Period ends on March 31. You can make a one-time change to your coverage during this period. If you’re happy with your plan, there’s no need to switch. But if you’re ready to see what else is out there, take the next week to consider your options and make sure you’ve got the plan that works for you.