What is a California Medicare Advantage Plan?
Traditional Medicare covers about 80% of all major medical costs. It does not cover minor medical for things like vision, hearing, dental, and prescriptions. The Medicare Advantage plans available in California can include minor medical benefits, but are not required to. Most do include coverage for prescriptions.
While it is nice to have coverage for minor medical costs, it is critical that you understand exactly what you get when you join a Medicare Advantage plan in California. In particular, you need to know that these plans have complete control over your access to doctors and other healthcare providers. If you've ever had a managed care plan (HMO, PPO, etc.) through an employer, then you already know what to expect.
Medicare Advantage vs. Medicare: Is There a Big Difference?
The best way to understand the differences between Medicare Advantage and traditional Medicare is to evaluate the pros and cons of each type of coverage.
The Pros and Cons of California Medicare Advantage Plans vs Original Medicare
- With Medicare Advantage you must use California healthcare providers within the plan's network. With Original Medicare, you can use the Medicare-approved provider of your choice.
- If you travel and have a medical emergency, Medicare Advantage covers you. However, if you are a snowbird and winter or summer in another state, non-emergency doctor outside of your plan's network won't be covered.
- All Medicare Advantage plans sold in California protect you with an annual maximum out-of-pocket (MOOP) limit. Once you reach this spending limit the plan pays all additional copays and coinsurance that you'd normally pay out-of-pocket. Original Medicare does not have an out-of-pocket maximum.
- Most Medicare Advantage plans come bundled with a California Medicare Part D plan for prescription coverage. With Original Medicare, you must enroll in a stand-alone Part D plan. But, the stand-alone plans offer more choices to get lower-cost prescriptions.
- With Original Medicare your costs (copays, coinsurance, etc) are predictable, and you can get a Medicare supplement to help pay these costs. In the Medicare Advantage program, each plan can charge what they want for copays and coinsurance, making it very difficult to compare actual costs.
Medicare Supplements vs. Medicare Advantage
We're frequently asked:
- Why are Medicare Advantage plans bad?
- What are the disadvantages of Medicare Advantage plans?
- Is it better to have Medicare Advantage or Medigap?
Let's take just a minute to dispel any misconception that these plans are bad or might have serious disadvantages.
Why California Medicare Advantage Plans are Bad
This is a myth. There's nothing wrong with Medicare Advantage plans. In fact, over 20 percent of all Medicare beneficiaries in California choose Medicare Advantage.
What you really need to know is that these plans are not for everyone. Some people are better served with traditional Medicare and a Medicare supplement. The question is, which option is best for you?
MedicareWire advises people who have one or more serious chronic conditions to keep their Original Medicare, particularly if you have specialists treating you and you want to stay with them. Our opinion is that Medicare Advantage is an excellent option for those who qualify for both Medicare and Medicaid (dual eligible) and for extremely healthy, active seniors.
Similarly, traditional Medicare, plus Medicare supplement insurance, work best for people with chronic health conditions, as well as those who can afford a higher monthly premium. Most experts agree that this is the best health insurance seniors can get in California.
The Disadvantage of Medicare Advantage Plans if You Live in California
The disadvantage of Medicare Advantage plans is the strength of California Medigap plans. You see, when you take doctor choice out of the equation, the big difference between Medicare Advantage and Medigap is when you pay for services.
Medicare Advantage plans have a monthly premium, but it's generally less than a Medicare supplement, and some plans even have a $0 premium. But, you also pay when you use health care. These are the copays.
With a Medicare supplement plan you pay most of your costs in advance with monthly premiums. Depending on the level of coverage you choose, the plan can cover all of your copays, coinsurance, and deductibles except the annual Part B deductible. This makes your monthly healthcare costs more predictable, particularly if or when you have serious health problems.
Which is Best in California, Medicare Advantage or Medicare Supplement Insurance?
- If you can afford Medigap Plan F or G, then keep your Original Medicare and add one of these supplements.
- If you are a healthy senior and have good health in your family heritage, Medigap Plan N will let you save money by sharing some costs when you see your doctor.
- If you are a healthy senior but you cannot afford a Medigap Plan F, G, or N, Medicare Advantage is a good choice.
- If you are turning age 65, have one or more chronic health conditions that require frequent doctor visits, and you do not qualify for both Medicare and Medicaid (dual eligible), the most Medigap coverage you can afford is the best option.
- If you qualify for both Medicare and Medicaid, regardless of your health condition, Medicare Advantage is your best option.
- If you have special needs (i.e., a full-time nursing home resident, diabetes, etc.) and an appropriate Medicare Advantage Special Needs Plan (SNP) is available, this is your best option.
Frequently Asked Questions About California Medicare Advantage Plans
Medicare Advantage plans vary from County to County in California. This is due to the local nature of healthcare provider networks. If you enter your zipcode into this tool it will show you all of your plan options and 5-star ratings.
More than 90% of all Medicare Advantage plans in California include a Part D plan for prescriptions, but not all. However, coverage is different with each plan. It is very important to verify that a plan covers your most important medications before you join. You can do so using this tool.
To understand the pros and cons of Medicare Advantage, you need to compare it with Original Medicare and factor in your health and financial situation. This article can help you compare which type of plan is best.