Medicare Part C – Medicare Advantage (MA)

Medicare Part C, or Medicare Advantage (MA) is an alternative to “Original Medicare”. Original Medicare is the traditional fee-for-service Medicare plan for Part A and/or Part B, whereas MA is an option that beneficiaries can choose instead of Original Medicare. Medicare Advantage is provided by Medicare-approved private insurance companies, such as Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), private fee-for-service (FFS) plans, special needs plans (SNPs), and Medicare Medical Savings Account (MSA) plans. A beneficiary can add prescription drug coverage to Medicare Advantage. An MA plan that includes Part D is typically called Medicare Advantage Prescription Drug (MA-PD) (Glossary, n.d.; How to get drug coverage, n.d.; Your Medicare coverage, n.d.).

Enrollment in Medicare Advantage instead of Original Medicare has been increasing. Beneficiaries generally choose MA plans because they can receive better, higher-quality services, as well as additional benefits that Original Medicare does not provide (even when Medigap is included). Furthermore, MA plans have a different approach to health care delivery than traditional FFS Medicare. For example, instead of just treating seniors when they are sick, MA plans put a major emphasis on preventive health services, early disease detection, and avoiding illnesses where possible (Seniors to lose benefits, 2014). In fact, “research has shown that beneficiaries in Medicare Advantage plans receive higher quality care, are subject to fewer preventable hospital re-admissions and are less likely to have potentially avoidable hospital admissions” (Seniors to lose benefits, 2014, para. 8). Therefore, those seniors who choose MA plans generally express higher satisfaction with their coverage and their benefits than seniors with Original Medicare (Seniors to lose benefits, 2014). Besides the quality of care and added benefits, “analysis of federal data shows that Medicare Advantage is an important option for low-income and minority Medicare beneficiaries” (Seniors to lose benefits, 2014, para. 7). Due to the benefits of an MA plan, over 22.0 million Medicare beneficiaries (approximately 34%) have chosen to enroll in Medicare Advantage (The Henry J Kaiser Family Foundation, June 2019).

It is important for beneficiaries to know that if they want an Advantage plan, they must have Part A and Part B coverage (How to get drug coverage, n.d.). In addition, MA plans are required to offer a minimum of the same Part A and Part B coverage as Original Medicare (GAO, 2011; Korn & Stone, 2013). The major benefit of choosing an MA plan is that you will have added coverage than you would if you had an Original Medicare plan, such as extra days in the hospital, lower coinsurance/copayments, lower deductibles, long-term care, and other benefits not provided by Original Medicare. The exact coverage and costs associated with your MA plan depend on the plan you choose based on your needs (Learn about, 2012; SSA, 2013).

The down-side to choosing Medicare Advantage is that adding coverage may come with higher premiums.  The premium amount is related to the coverage and benefits chosen. Therefore, you can choose the best balance for your needs. In addition, since MA plans typically cover the same (and more) gaps in coverage as Medigap, you are not allowed to purchase Medigap in addition to an MA plan. You can only purchase Medigap if you have Original Medicare (SSA, 2013). Another potential downside to Medicare Advantage is that the plan may limit your network of providers (Learn about, 2012; What is Medicare, 2011). This is another issue that should be discussed with an MA plan before you sign up to make sure your preferred provider is included in the network. It is also important to be aware that if you have MA coverage that includes Part D and then you sign up for Part D under Original Medicare, you will be automatically disenrolled from Medicare Advantage (How to get drug coverage, n.d.).

Medicare Advantage Special Needs Plans (SNPs). A major sub-sector of Medicare Advantage are Special Needs Plans (SNPs). In 2019, nearly 3 million Medicare beneficiaries are enrolled in SNPs (The Henry J. Kaiser Family Foundation,  June 2019). These plans first began as part of the Medicare Modernization Act (MMA) of 2003 and were established to provide care for individuals with unique special needs. This resulted in three types of SNP plans (CMS, 2011a; CMS, 2014c). Special Needs Plans (SNPs) restrict enrollment to specific types of beneficiaries with significant or relatively specialized care needs. The majority of SNP enrollees (85%) are in plans for beneficiaries dually eligible for Medicare and Medicaid (D-SNPs), with the remainder in plans for beneficiaries requiring a nursing home or institutional level of care (I-SNPs), or with severe chronic or disabling conditions (C-SNPs.) (The Henry J. Kaiser Family Foundation, June 2019)

Beneficiaries should know that SNPs are only a part of Medicare Advantage, not Original Medicare. However, these plans are required to cover all services that are covered by Original Medicare Parts A and B. In addition, SNPs are required to carry a Part D plan. The prescription drugs covered under the Part D plan may vary, though, depending on the type of SNP you join.  The out-of-pocket costs for participating in an SNP also vary widely depending on eligibility, the type of SNP you are enrolled in, and where you live (DHHS, 2011).

Medicare Medical Savings Account (MSA) Plans

Medicare works with private insurance companies to offer you ways to get your health care coverage. These companies can choose to offer a consumer-directed Medicare Advantage Plan, called a Medicare MSA Plan. These plans are similar to Health Savings Account Plans available outside of Medicare. You can choose your health care services and providers.

Medicare MSA Plans have 2 parts

Medicare MSA Plans combine a high-deductible insurance plan with a medical savings account that you can use to pay for your health care costs.

  1. High-deductible health plan: The first part is a special type of high-deductible Medicare Advantage Plan (Part C) . The plan will only begin to cover your costs once you meet a high yearly deductible , which varies by plan.
  2. Medical Savings Account (MSA): The second part is a special type of savings account. The Medicare MSA Plan deposits money into your account. You can use money from this savings account to pay your health care costs before you meet the deductible.

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