Medicare Advantage plans are not nearly as complicated as they are made out to be by their opponents. Personally I have shopped both for individual health care for myself and medicare plans for my family, and I found it to be dramatically easier to shop for the medicare plans. This is because the medicare.gov website presents all available plans in an easy to compare format.
What is Medicare Advantage?
Medicare Advantage plans are referred to as privatized medicare because private insurance companies administer the plans on behalf of the federal government. The government in turn subsidizes the companies and requires that they comply with certain rules and restrictions. Due to the government subsidies these plans are available to medicare eligible consumers at little or no cost.
How is coverage effected?
It has been my experience that members of a Medicare Advantage Plan actually have better coverage than individuals with Original Medicare. The private insurance companies use Medicare guidelines when determining coverage for most services, however they often offer additional services such as annual physicals. Also, there is no need to purchase what is known as a Medigap policy.
Medigap vs Medicare Advantage
Original medicare generally only covers 80% of any given medical service. The remaining 20% of the cost will be billed to the beneficiary unless that individual has purchased an insurance policy from a private insurer that fills in the “gaps”, hence the name Medigap. Like Medicare Advantage Plans, Medigap Policies are regulated by the federal government.
There are several varieties of Medicare Advantage plans available. Health Maintenance Organizations (HMO) require members to seek medical services only from doctors and hospitals within a certain network. Preferred Provider Organizations (PPO) encourage members to seek services from doctors or hospitals within a certain network by charging a higher copay for services rendered outside of the network. Meanwhile, Private Fee-for-Service (PFFS) plans have no network but set a standard fee per service rendered and allow doctors to decide whether or not to accept a patient based on the fee schedule (this is the type of service my family uses and we have never been turned away by a doctor because of it). Details on these and other plans are available on the medicare.gov website.
Medicare Part D – Prescriptions
Currently Medicare offers some coverage for prescription drugs. It is a convoluted system that Medicare recipients must opt-into and always seems to run out before the end of the year. This gap in coverage is referred to as the doughnut hole. Many Medicare Advantage plans will administer the prescription drug portion of a member’s medicare coverage and some even provide a measure of additional benefits during the infamous doughnut hole.
Why I like Medicare Advantage Plans
I do not understand why people so dislike Medicare Advantage Plans. It seems the word “privatized” is used to somehow vilify these plans, but after three years of dealing with them I personally have had no major grievances. Quite frankly I find that using a private company helps to cut through the red tape and overwhelming bureaucracy of government run health care.
Private companies make more options available by offering different levels service such as HMO, PPO and PFFS. They simplify medicare by rolling all medicare services (parts A, B, D and Medigap) into one. And for me the biggest contrast between Original Medicare and Medicare Advantage Plans is customer service. I can call the private insurance company for quick answers to my questions, which has not been my experience calling The Offices of Medicare and Medicaid. Unfortunately, I seem to be in the minority on this issue and it is unlikely that Medicare Advantage Plans will survive President Obama’s administration.