For Medicare beneficiaries who want to join an Advantage Plan, now is the time to do it.
Just be sure you know what the plan covers and what your potential costs will be — and how long you have to change your mind.
During the annual fall open enrollment period, which is now underway and runs through Dec. 7, one of the things you can do is sign up for an Advantage Plan, as long as you have original Medicare (Part A hospital coverage and Part B outpatient care).
While these plans continue growing in popularity and availability, there are some things to know.
“Not all will have the same benefits,” said Elizabeth Gavino, founder of Lewin & Gavino and an independent broker and general agent for Medicare plans. “You have to see what’s important to you.”
Roughly 63.3 million individuals get their health coverage through Medicare. The majority of them — 55.1 million — are age 65 or older, while the remainder are younger with permanent disabilities or individuals with end-stage renal disease.
Nearly 27 million beneficiaries get their Parts A and B benefits delivered through Advantage Plans, which are offered by private insurers and typically include Part D prescription drug coverage.
The remainder stick with original Medicare (Parts A and B). Those beneficiaries often pair that with a stand-alone Part D plan and a Medicare supplemental plan (aka Medigap), both of which also are offered by private insurance companies.
In addition to prescription drug coverage, many Advantage Plans offer benefits unavailable through original Medicare, which may include dental, vision, hearing, fitness programs, telemedicine, money for healthy food, personal household help or other extras.
However, depending on the specifics of the plan, you may be limited to in-network doctors, hospitals and other providers. Or, if the plan does include coverage for treatment out-of-network, you may pay more for those visits.
“Check that your favorite providers and hospitals are in the network and that your medications are on the plan’s formulary,” said Danielle Roberts, co-founder of insurance firm Boomer Benefits.
And even if you find a plan with no premium, you’ll still generally be responsible for your Part B premium (which is forecast to rise to $158.50 in 2022 from $148.50 this year, although it has not been formally announced yet).
The average monthly premium for Advantage plans will be $19 next year, down from $21.22 in 2021, according to the Centers for Medicare & Medicaid Services.
Also keep in mind that the lower the premium, the more you’ll pay in cost-sharing, generally speaking. And the specifics of that — whether out-of-pocket limit, deductibles, copays or coinsurance — differ from plan to plan.
If you have a Medigap policy and you want to enroll in an Advantage Plan, you get a year to change your mind as long as this is the first time you’ve signed up for one, Roberts said.
“During that 12 months, you can dis-enroll from the Advantage plan, return to original Medicare and re-enroll in your same prior Medigap plan with no underwriting,” Roberts said.
Otherwise, trying to re-purchase Medigap beyond that could mean the insurance company deciding whether to insure you or not, based on your health. Generally, you only are guaranteed to qualify for a Medigap policy — regardless of pre-existing conditions — for six months when you first enroll in Medicare, unless your state has more flexible rules.
One aspect of coverage that can catch people by surprise is the hospitalization cost under an Advantage Plan, experts say. While original Medicare comes with a Part A deductible ($1,484 for 2021; estimated to be $1,556 for 2022) when you’re admitted to the hospital, there are no copays for the first 60 days of that inpatient care. In contrast, Advantage Plans often have a daily copay, which can result in a higher cost.
For a hospital stay of five days or more, at least half of Advantage enrollees would pay more than beneficiaries who have original Medicare, research from the Kaiser Family Foundation shows.
If you travel often, be aware that Advantage Plans may only cover you outside your local area for emergency medical treatment, not for routine visits.
“If you’re traveling, you may want a plan that has a broader network so you can travel around the country and have access to medical care that’s not an emergency,” said Gavino at Lewin & Gavino.
Also, separately from the rules applying to dropping Medigap to try out an Advantage Plan, there is an opportunity for all Advantage enrollees to change their mind about their choice made during open enrollment. That is, between Jan. 1 and March 31, you can switch to either another Advantage Plan or drop it in favor of original Medicare (and pick up a standalone Part D prescription drug plan).