Medicare Advantage Plans

Why do some people seem to hate all things private? There is a push to get rid of "privatized" medicare plans referred to as Medicare Advantage Plans. But based on my experience with Medicare this is the only part that makes any sense.

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 benefits 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.

Finding a plan

Once complaint I've heard is that seniors buy these policies without really knowing what they are getting. Likely that's the fault of a bad sales person, not the plan itself. I have shopped both for individual health care for myself and for medicare plans for my family, and I found it to be dramatically easier to shop for the medicare plans. If you don't trust your salesperson check out the medicare.gov website. It presents all available plans in an easy to compare format.

Choices

One of the things that Medicare Advantage Plans offer that Original Medicare does not is choices. There are several varieties of Medicare Advantage plans available. Picking one is a matter of determining if you are more interested in low fees or freedom to choose your doctor.

-Health Maintenance Organizations (HMO) keep fees low by requiring members to seek medical services only from doctors and hospitals within a certain network.

-Preferred Provider Organizations (PPO) offer the freedom to choose any doctor but encourage members to seek services within a certain network by charging a higher copay for out-of-network services.

-Private Fee-for-Service (PFFS) offer the most freedom because they have no network. Instead they set a standard fee schedule and patients are required to pay the doctor any charges that go over their limit. However overages can be avoided by checking to make sure your doctor accepts this type of plan before making the appointment.

Medicare Part D - Prescriptions

Currently Medicare offers a convoluted system for perscription drug coverage called Part D. It is separate from Original Medicare and recipients must opt-into it or they don't get coverage. Additionally it always seems to run out before the end of the year. Many Medicare Advantage plans make life a little easier by administering the prescription drug portion of a member's medicare coverage. Some even provide extra benefits like covering generic drugs even during the "donuthole" at the end of the year.

Why I like 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 with them. Quite frankly I find that using a private company helps to cut through the red tape and overwhelming bureaucracy of government run health care.

I like the options made available by these plans. They also simplify medicare by rolling 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.