Have you been considering Medicare Advantage in Michigan? While original Medicare can be straight forward, there are a good bit of moving parts when it comes to a Medicare Advantage plan.
In today’s article, we’ll explore the following:
- What is Medicare Advantage and how it works
- Common questions that people ask about Medicare Advantage
- The most common types of Medicare Advantage plans.
- What to look for and how to evaluate the different plans of Medicare Advantage in Michigan.
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What Exactly is Medicare Advantage in Michigan?
Before we jump into what Medicare Advantage is, it’s important to understand what “Original Medicare” covers.
When we talk about “Original Medical” we’re talking about the government ran health insurance program. Most people know this as Part A and Part B. Unlike Medicare Advantage Plans, “Original Medicare” use Medigap plans, or Medicare Supplements, to cover the gaps in coverage.
Medicare Advantage, also known as “Part C” is the private insurance administration of the Medicare program. Instead of the federal government overseeing the program, insurance companies, such as Priority, Aetna, or Blue Cross Blue Shield of Michigan actually oversee your healthcare costs.
How Does Medicare Advantage Work?
Medicare Advantage is required to offer the exact same benefits as “Original Medicare” but private insurance companies are allowed to establish multiple cost-saving measures that the Federal Program does not have. These can include the following:
- Prior Authorization for services
- Step Care (when the least expensive treatment is tried first, such as physical therapy before surgery.)
- Additional Cost Sharing measures (such as co-pays, co-insurance, and deductibles.)
The best way to think of Medicare Advantage in Michigan is to think of it similarly to work-based insurance.
Top Medicare Advantage Plans in Michigan
Medicare Advantage in Michigan can come in multiple different types. However, the most common plans fall into one of three buckets:
*CAVEAT: All Medicare Advantage plans are created differently. Regardless of the type of Medicare Advantage plan you select, it’s important to evaluate them based on your needs, doctors, medications, and pharmacies.*
It’s important to know that all Medicare Advantage plans have a maximum out of pocket cost for in-network costs. This amount is the total amount that you pay before the Medicare Advantage plan pays 100% of the remaining approved medical costs for the year. Every plan has a different Maximum Out Of Pocket Costs.
HMO's (Health Maintenance Organizations)
HMO’s are the most restrictive plans for Medicare Advantage in Michigan.
These plans require you to establish a Primary Care Doctor. This doctor’s job is to coordinate all of your care. In the event you need to see a specialist or have testing completed, your PCP must order it or refer you.
Secondly, coverage is only offered in an emergency (such as an ER or Hospital stay) or as long you are seeking treatment with an in-network physician. If neither of those conditions are met, you are 100% responsible for all costs.
The upside to HMO’s are they they tend to have lower out of pocket maximums along with paying less when you go to the doctor.
PPO (Preferred Provider Organization)
PPO’s are the less restrictive plans.
These plans allow you get services at any provider that will accept the plan and do not require a Primary Care Doctor or referrals for most tests or specialists. However, these’ plans have a higher cost when it comes to seeking treatment outside of the network.
Furthermore, there is a higher maximum out of pocket cost when it comes to using out of network providers. However, in-network costs can cover a portion of the total maximum out of network costs when using out of network providers.
It’s important to know how much you will be responsible for when you use services out of network and what the “out of network” maximum out of pocket costs are per year. This amount is higher than the in-network maximum.
HMO/Point of Service
HMO-POS plans are a hybrid plan between a standard HMO and a PPO. They work very similarly to a PPO plan where you can see most providers and generally don’t need a referral.
You will need to select a Primary Care Doctor and a referral can help you see a specialist faster. Furthermore, for some specialized tests you will require prior authorization.
HMO-POS plans also have separate deductible for in and out of network services. Some plans can even have no maximum out of pocket costs when it comes to out of network services.
Cost of Medicare Advantage Plans in Michigan
Medicare Advantage in Michigan can be a bit confusing. The primary issue with Medicare Advantage is that plans with the same name can offer different benefits and premiums depending on the county or region you live in. In fact, Medicare Advantage plans can be excluded from different regions throughout the state.
Some Medicare Advantage plans can have no premium from the insurance company, but you will always be responsible for the Part B monthly premium from Medicare. Other plans can cost over $100 a month plus the Part B premium.
The last thing you need to know about Medicare Advantage plans is that costs can increase every year on January 1st.
*Caveat: It’s important to work with a licensed agent when it comes to Medicare Advantage to ensure you’re getting the benefits that best fit your needs. A licensed agent should also serve an annual resource for you to make sure that you have the best plan in the future.*
What Do Medicare Advantage Plan Cards Looks like in Michigan?
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Is A Medicare Advantage Plan Right For You?
No insurance agent should tell you to buy a Medicare Advantage plan vs a Medicare Supplement plan. Their job is to advise your of the benefits and features of each plan, and offer suggestions based on your needs.
In this section, you’ll learn about the positives and negatives of a Medicare Advantage plan. You’ll also get the opportunity to learn about a Medicare Supplement plan that can mimic the out of pocket costs of a Medicare Advantage plan, but offers more freedom and lower maximum out of pocket costs.
Positives of a Medicare Advantage Plan
Medicare Advantage plans do offer a number of advantages over Medicare Supplements:
- Minimal Medical Underwriting– You can switch Medicare Advantage plans without medical underwriting annually, during the open enrollment period (October 15-December 7th)
- Additional Benefits- Medicare Advantage plans can come with additional benefits that Original Medicare does not. This can include Dental and Vision coverage, over the counter stipends for vitamins or other OTC medical supplies, and even gym memberships (like Silver Sneakers.)
However, it’s important to know that these benefits can change or be removed at any time as they are not part of Original Medicare.
- Lower Premiums– Let’s face it, Medicare Part B + Medicare Supplement + Part D can be pretty expensive. Medicare Advantage plans usually come with a Part D plan already built-in and generally have a lower premium than a Medicare Supplement.
Disadvantages to Medicare Advantage
While the above sounds great, there are a number of disadvantages that we’ve already discussed and a few we haven’t:
- You’ll spend more when you use your plan- Medicare Advantage has built-in cost-sharing measures that could cost you a significant amount of money. The biggest gaps concerning Medicare Advantage are if you develop cancer or have a hospitalization (or multiple ones in a single year.) This can cause you thousands of dollar in a single year.
- Annual Changes- Medicare Advantage has to be approved by Medicare to offer services, but networks (doctors and hospitals) can remove themselves from the network. This can leave you to find a new doctor that’s within the plan’s network.
Furthermore, premiums, co-pays, and co-insurance can change annually. This is also true with any additional benefits that a plan offers that Medicare doesn’t cover.
- Inflexibility of Part D (Drug Plan)- Most Medicare Advantage plans offer a drug plan. However, if it doesn’t, in most cases you cannot buy a Part D plan without disenrolling in the Medicare Advantage plan.
Furthermore, you have to follow the formulary (drug list) that’s attached to the Medicare Advantage plan.
Medicare Advantage in Michigan vs Considering a High Deductible Medicare Supplement
Medicare Supplements are considered the gold standard when it comes to Medicare private insurance. Many people shy away from them because of the costs, which can reach over $300 a month in your 80’s.
However, most people do not know about a High Deductible Medicare Supplement.
High deductible plans offer the freedom of being able to use any provider that accepts Medicare in the US. Furthermore, there’s a lower maximum out of pocket costs. For 2021, the max out of pocket cost for a High Deductible Medicare Supplement is $2370. After that, the Medicare Supplement plan pays 100% of all Medicare approved costs.
Furthermore, before you reach the High Deductible plans $2370, Medicare continues to pay as normal. That means you’ll pay the deductible for Part B ($203 for 2021 + 20% afterward) and Part A ($1484 for 2021) for any hospitalizations. This is consistent with how most Medicare Advantage plans are structured.
You will have to buy a drug plan as well, but you get the freedom to buy the plan that saves you the most money vs the plan that’s assigned to the Medicare Advantage plan.
The costs can be only a fraction of what a Medicare Supplement Plan G would be, and can be pretty close to what you’d pay with a Medicare Advantage plan.
CAVEAT: Always work with an agent to decide if a Medicare Advantage plan vs a High Deductible Medicare Supplement fits your needs.
Medicare Advantage can be complicated to understand and to figure out if it’s right for you. If you’ve found this article helpful, don’t keep it to yourself.
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