Generally, Advantage Plans have lower premiums than Supplement Plans. However, this is because you are agreeing to use Doctors who are in the plan’s local network, and you will pay copays when you visit Doctors and hospitals. Conversely, a Medicare Supplement Plan has no networks and little to no copays, depending on which Supplement Plan you choose.
These plans are offered by private insurance companies, so when you enroll in an Advantage Plan, Medicare will pay the insurance company a fee every month to administer your Part A and B benefits. So you will need to enroll and remain enrolled into Medicare Parts A and B in order to have an Advantage Plan. The private insurance company that’s offering the Advantage Plan fully takes on the risk associated with your medical expenses. When you go to a Doctor or hospital, you will present your Advantage plan ID card, and your providers will bill the plan instead of Original Medicare.
With an Advantage Plan you will usually pay copays when you visit Doctors and hospitals. However, most of the time a Medicare Part C Plan will have an out-of-pocket maximum. The only plans that may not have this feature are dual eligible plans for people with Medicare and Medicaid. The out-of-pocket max is an amount that is decided by Medicare each year. Currently, this number is $6,700. Depending on your location, there may be plans available with a lower out-of-pocket max cost. This can be a great value for some because Original Medicare has no out-of-pocket maximum. You are required to pay 20% of your services over and over again. With a Medicare Advantage Plan, you should just budget for the fact that you will have to pay copays for services (until you reach the out-of-pocket max). Every Advantage Plan has its own summary of benefits. This summary will tell you what your copays will be for various healthcare services.
Copay rates vary between states and counties, but average copays could be between $5-20 for Doctor’s visits, $40-$50 for Specialist’s visits, $250-$400 for surgeries, and $250-$350 per night for Hospital stays.
It is in your best interest to enroll in Medicare Advantage through an unbiased insurance agent, who can fully explain how the plan works. Enrolling without an agent means you are on your own if your run into problems with your policy, or don’t enroll correctly.
What is the difference between Original Medicare (Parts A and B) and Medicare Advantage (Part C)? With Original Medicare you will have deductibles to pay and a 20% coinsurance on Part B. However, you can go to any doctor or hospital that participates in Medicare, and most do.
With an Advantage plan, you will use the plan’s local network of providers. So you will want to make sure that your preferred Doctors are in the plan’s network before you enroll into an Advantage Plan. You will also pay co-payments when you receive healthcare services. However, you will not need to pay a coinsurance, and you will have an out of pocket maximum spend (which Original Medicare does not have). This caps your annual healthcare expenses at a certain amount.
Another big difference between Medicare Advantage and Original Medicare is in changes to the plans year over year. Original Medicare may have small changes to Part A and Part B deductibles, but that’s about the only change you should see. Medicare Advantage plans on the other hand change annually. An Advantage Plan’s premium, copayments, and networks could change. So it’s a good idea to review your Advantage Plan’s benefits annually. If you are no longer happy with your plan’s benefits you could make changes during the Annual Enrollment Period.
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