What’s the benefit of a Medicare Advantage plan?

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Q. Each doctor/medical group I use seems to be introducing a new program for senior citizens, calling them a Medicare Advantage Group, or Medicare Advantage Organization. It isn’t quite clear what they’ll do for patients. Are they additional private Medicare plans or Medicare HMOs? My Medicare enrollment started on Aug. 1, 2020 and I have a “supplemental” plan as part of my retirement benefits. Is there any benefit to signing up with one of the other groups? It’s confusing.
— Senior citizen

A. Getting on board with Medicare certainly is confusing.

Let’s start with the basics.

Medicare is a government program that provides health insurance for people starting at age 65, and some people with disabilities.

Original Medicare covers hospital (Part A) and medical insurance (Part B), said Dawn Brown, a certified financial planner with Peapack Private Wealth Management in New Providence.

In addition supplemental plans (Medigap) and prescription drug coverage (Part D) can be individually purchased, she said.

“Medicare Advantage plans bundle Part A, B and D under one umbrella and add additional benefits such as vision and dental,” Brown said.

There are several types of Medicare Advantage plans that are provided through private companies.

“The main type of Advantage plans are Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO),” Brown said. “The HMO plan will likely be more restrictive. The PPO plan will likely allow you to seek care from out of network providers and you may not need a referral to see a specialist.”

If you switch to a Medicare Advantage plan during an open enrollment season, it would be an alternative to the Medicare coverage you currently hold, she said, noting that Medicare Advantage does not include a supplemental plan.

You have to check the details of your retirement benefit “supplemental” plan to see if it will still provide benefits with an Advantage plan to cover any out of pocket costs you may incur, she said.

Prior to considering a switch, you can use the out-of-pocket calculator on the Centers for Medicare & Medicaid Services website to help understand the difference in cost.

Also, you would need to check if all the doctors/specialists you currently use are in the network being offered by the doctor/medical group, she said.

“If they are not part of the network you would have to seek new providers within the network or determine if you can see them out-of-network,” Brown said. “Also, doctors can choose to leave a network at any time but plans can only be switched during an open enrollment period or if you moved out of the network area.”

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This story was originally published on Feb. 26, 2021

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