2021 Guide to Shopping & Comparing Medicare Advantage Plans
Medicare Advantage is a private health insurance option for Medicare beneficiaries. It's a great option, but it's not the best option for everyone.
This page offers a complete guide to Medicare Advantage plans, including benefits, coverage, costs, and much more. If you're new to Medicare, or you simply want to learn more about Medicare Advantage, you're in the right place.
We'll explore everything you need to know about Medicare Advantage to help you make the best decision for your personal situation. Most importantly, we'll help you understand if Medicare Advantage is right for you.
What are Medicare Advantage Plans?
Medicare Advantage (MA), also known as Medicare Part C, are private health plans offered to beneficiaries eligible for Original Medicare (Part A and Part B). About 30 percent of all new Medicare beneficiaries enroll in Medicare Advantage.
Medicare Advantage Plans are not the same as supplemental Medicare insurance, like Medigap plans. They are a complete alternative to traditional Medicare health insurance that has the flexibility to offer additional services.
With an MA plan, you get all of your Medicare Part A (Hospital Insurance) coverage, Medicare Part B (Medical Insurance) coverage, and other health benefits through a single plan. By law, an MA plan must offer the same health insurance coverage provided by Original Medicare. Most offer more coverage and benefits.
It's important to note that joining an MA plan does not take you out of Medicare. You still have all of the rights and protections the government guarantees, however, your healthcare services are covered by your private insurer. Also, Medicare Advantage is not the same as Obamacare. If you qualify for Medicare you are not eligible for Obamacare, regardless of your income status.
Most people choose one of three types of Medicare Advantage Plans: Health Maintenance Organization (HMO) plans, Preferred Provider Organization (PPO) plans, or Private Fee-for-Service (PFFS) plans. These common MA plans are offered in most areas.
There are other types of plans that may or may not be offered in your area, including HMO Point-of-Service plans, Medical Savings Accounts (MSA), and Special Needs Plans (SNP). If you are looking for an MA plan that can replace a Medigap policy that gives you fee-for-service flexibility at a reduced overall cost, investigate MSA plans in your area.
How do I qualify for a 2020 Medicare Advantage Plan?
Most people qualify to enroll in a Medicare Advantage Plan when they meet these conditions:
- You qualify for or already have Medicare Part A and Medicare Part B coverage.
- You live in an area serviced by the MA or MAPD plan you want to join (plans are regional, not national).
- You do not have End-Stage Renal Disease (ESRD).
How Much Do Medicare Advantage Plans Cost?
At a minimum Medicare Advantage (MA) Plans cost the same amount as your monthly Part B premium. For the 2021 plan year that's $148.50. If your annual income is over $85,000, you will pay a bit more.
You may notice that some Medicare Advantage plans in your area have a zero dollar ($0.00) premium. This simply means that the full premium for the plan is covered by what you pay for your Medicare Part B.
The additional monthly cost Medicare Advantage plans charge will depend on the additional services offered and the area of the country where the plan is offered. Competition, cost of living and the availability of health networks in your area are all factors.
When comparing plans, look at more than just the cost. Here are some questions you should carefully consider when shopping for an MA or MAPD plan:
- What type of health services do you need? How often?
- How much do you currently spend on copayments, coinsurance and additional insurance coverage each year?
- Does the plan have a yearly deductible? If so, how much?
- Does it charge a deductible for any of the most common services?
- How much will you pay for each doctor's visit or service (copayments) in-network and out-of-network?
- Does the plan charge a monthly premium in addition to your Medicare Part B premium?
- Does the plan pay any of the Part B premiums?
- How much is the plan's maximum out of pocket expense (annual)?
- Does the plan include a Medicare Part D prescription drug plan (most do)?
- What additional benefits does the plan offer, such as hearing, vision and dental coverage? Do you need them? What do these benefits cost?
As you can see, there is a lot to consider. Do your homework and call the plans you are considering before joining (our plan pages include contact information). Have them fully explain their rules and calculate your costs so you can make sure the plan you choose will meet your needs. When in doubt, call Medicare directly for assistance.
When Can I Enroll in a 2021 Medicare Advantage Plan?
Unlike Medigap, which does not have a specific enrollment period, you are only allowed to enroll in a Medicare Advantage (MA) Plan or Medicare Part D Plan (PDP) during the annual election period (AEP) or during your initial enrollment period (IEP). It's critical that you mark these open enrollment period dates on your calendar.
Medicare's annual election period is the same time each year. It starts on 15 October and ends on 7 December. This is an important date to mark on your calendar.
During AEP you can dis-enroll from your existing MA or PDP plan, if you have one, and enroll in a new plan. If this is your first time enrolling, it will be your opportunity to discover the various tools available to compare MA plans.
In addition to AEP, you have your own initial enrollment period. Your IEP happens once when you first qualify for Medicare benefits. For most of us, our IED happens when we turn 65, but it can also be when you qualify for Medicare due to a disability or ESRD.
Your IEP is a 7 month period that starts 3 months before the month you turn 65, includes the month you turn 65 and ends 3 months after the month you turn 65. In most cases, your Social Security office will send you a reminder.
If you are newly eligible for Medicare because you’re disabled and under 65, you can sign up for a Medicare Advantage Plan or a Medicare Prescription Drug Plan starting 21 months after you get Social Security. Your Medicare coverage begins 24 months after you get Social Security. Your chance to enroll in an MA plan lasts through the 27th after you get Social Security benefits.
How-to Compare Medicare Advantage Plans
When you compare plans, be sure to consider deductibles and drug co-pays as well as the plan premium. Rates are not standardized by the government. Although many Advantage plans are fully covered by your flat-rate Part A and Part B premium, your out-of-pocket expenses will be different with each plan.
Remember, Medicare Part C combines your Part A and Part B options and optionally provides Part D drug coverage, as well. It’s called Medicare Advantage because, in most cases, it is a lower-cost alternative to Original Medicare. Be mindful of the fact that the insurer sets service limits. This is how they control costs.
Medicare Advantage & Your Health Care Providers
All Medicare Advantage plans and the insurance carriers that offer them are different. In the case of an HMO plan, most insurance carriers coordinate your health care through a primary care physician. They manage your needs with the specialists and hospitals that deliver the care. In this type of plan, most often you will need to use the doctors and hospitals within the plan's network.
PPO based Medicare Advantage plans are more flexible. A PPO plan allows you to get your healthcare from any eligible provider. Medicare-eligible providers accept the terms, conditions and payment rates of the plan before providing coverage. Providers can decide whether or not to accept those terms, conditions and payment rates each time they furnish covered services.
Does Medicare Advantage Affect Original Medicare Benefits?
If you choose a Part C plan you will remain in the Medicare Program, however, you give up your normal Part A and B coverage. You continue to have Medicare rights and protection, and you can switch back to Original Medicare later if you decide the Part C plan does not suit your needs.
Be aware that Part C plans are specific to each state and county. You must reside in the prescribed service area of the plan you wish to join. If you have End-Stage Renal Disease, in most cases you will not be permitted to use a Part C plan.
Medicare Advantage is not complicated once you understand the basics. However, before you choose health care insurance, make sure you have a full understanding of both the coverage and premiums.
How-To Find The Best 2021 Medicare Advantage Plan
To help you make the best choices possible, here are seven tips that will make finding the best Medicare Advantage plan easier.
Tip 1: Compare and Research Annually
The single biggest mistake we see every year is seniors staying with the plan(s) they enrolled in the previous year, or several years ago. This can be a very costly mistake.
Plans change from year to year. With each new plan year carriers are allowed to update their monthly premiums, the formulary (drug list), deductibles, and more. Plus, the plan's quality rating changes, which we'll get to next.
In short, if you don't compare your current plan's premiums, deductibles, and coverage with its competitors, you could be leaving a lot of money on the table. This is particularly true if you enrolled in a brand new plan. New plans are notorious for raising premiums and switching around their formularies after getting seniors to enroll.
Tip 2: Look at the Quality Ratings
Each year the Centers for Medicare and Medicaid Services (CMS) publishes a summary 5-star rating on each plan's previous year's performance. Most people never look past the summary rating, but we feel it's important to do so.
The summary rating is based on a number of important factors that will give you a pretty good idea of what you can expect from a particular plan. For health plans CMS rates how the plan manages:
- Staying Healthy: Screenings, Tests, Vaccines
- Managing Chronic (Long Term) Conditions
- Member Experience with Health Plan
- Complaints and Changes in Plans Performance
- Health Plan Customer Service
Drug plans are similar. CMS evaluates:
- Drug Plan Customer Service
- Complaints and Changes in the Drug Plan
- Member Experience with the Drug Plan
- Drug Safety and Accuracy of Drug Pricing
On MedicareWire.com plan pages, we publish a breakdown of the summary ratings, in the categories listed above, so you can see how well a plan performs in the areas that are important to you.
By the way, plans that receive an overall rating of four to five stars get extra money from the government to spend on the healthcare of the plan's members. HINT: that means better healthcare for you if you join one of these plans.
Tip 3: Know Your Prescriptions
We don't need to tell you that the cost of medications is going up. Changes in the healthcare laws made some small improvements, yet what we pay out of pocket every year seems to outpace the cost of living increases by a large margin.
There are a number of factors that will change what you pay at the pharmacy. Your prescription dosage, prior authorization restrictions, step-up therapy requirements, co-payments, co-insurance, the pharmacy you use, and a myriad of other factors mix together to change what you pay for your prescriptions versus what your neighbor pays. This is why knowing everything about your prescriptions before attempting to choose a Medicare plan is critical.
The fact is this. Your unique combination of drugs, dosages, pharmacies, and more will change what you pay. As a result, finding the best Medicare Advantage or Medicare Part D plan for you could save you hundreds, even thousands, of dollars.
Tip 4: Be Willing to Switch Pharmacies
The Walgreen's down the street might be more convenient, but the CVS on the other side of town or your local grocery store could save you a wad of cash. The reason for this is simple: plans negotiate preferred pharmacy contracts, and they change over time. As a result, not only do you need to shop the plan with the best prices on the drugs you take, you also need to shop the lowest price at each pharmacy.
The bottom line is that you may need to use a different pharmacy to get the best price.
Tip 5: Call Your Doctor's Office
Your doctor's office knows what plans they accept, including the plans they are dropping and adding in the new year. So, give them a call and ask to speak with the billing department. This will help you narrow plans to those your favorite doctor accepts. Otherwise, you could be looking at finding a new doctor.
Tip 6: Look at the Cost of Seeing Your Doctor
So far we've put emphasis on your medications. For most seniors, this is what appears to have the most impact. However, seeing your doctor or making an emergency room visit could take a bite out of your budget if you choose the wrong health plan.
This is why we publish what each plan charges for basic inpatient and outpatient services. In general, we feel that a co-payment (fixed amount) is better than a coinsurance (percentage of the cost). With a co-payment, you will always know exactly what you owe when you see your doctor or visit the emergency room. With a co-insurance, you could be looking at a bill for up to 20% of the actual cost.
Look for the cost break down on our Medicare Advantage plan pages.
Tip 7: The Best Medicare Plan Might be Medigap
If you are enrolled in Medicare Advantage (Part C of Medicare), or you're considering it, chances are it's due to cost and your budget. We understand. But, maybe there's an alternative you should consider.
Medicare Advantage is managed care health insurance that's based on the level of risk to both you and the carrier. For you, the risk is what you will pay out-of-pocket before the plan begins to pick up the entire tab. This is called the Maximum Out-of-Pocket amount, or MOOP. For the 2021 plan year, the highest MOOP a plan can have is $7,550.
Here's an interesting and important fact. According to recent Kaiser Family Foundation research, nearly 50% of all seniors with a Medicare Advantage plan have a plan with a $7,550 MOOP. That means if you regularly see a specialist for a chronic condition or have an injury or illness that puts you in the hospital, you're likely to be pulling $7,550 out of your pocket before the plan takes over.
If you can afford this risk, there's a Medigap plan that offers complete health care flexibility and kicks into 100% coverage when you've reached $5,880 in annual out-of-pocket costs. It's Medigap Plan K, and it's worth looking at as an alternative, particularly if your Medicare Advantage plan options are limited.
Frequently Asked Questions About Medicare Advantage Plans
Most Medicare Advantage plans are coordinated care plans, most commonly called HMOs. In this type of plan, your care is coordinated through a primary care physician who acts as a gatekeeper to specialists, lab work, diagnostics, medical supplies, and other healthcare services. Compared to Original Medicare, this is the chief disadvantage. Read about the Top 9 Advantages and Disadvantages of Medicare Advantage Plans.
Medicare Advantage (MA) is a private health insurance option for Medicare beneficiaries. It's one option, but it's not the best option for everyone. MA plans work best for healthy seniors and people who have retiree health benefits, Medicaid benefits, or secondary payor benefits, such as the VA. People with chronic health conditions who do not have retiree health or Medicaid benefit may find a MA plan costs more than Original Medicare. Read the Top 7 Reasons Why Medicare Advantage Plans Are Bad.
Most experts feel that Original Medicare plus a Medigap plan for supplemental coverage is the best coverage you can get. But not everyone can afford a comprehensive Medigap plan. In some areas, most notably Florida, coverage is very expensive, and not everyone will be approved. In these cases, Medicare Advantage is a better option than Original Medicare alone. Read Medicare Advantage vs. Medicare Supplement: Which is Best for You? for more information.