Also known as Medicare Part C, Medicare Advantage plans are offered by private insurance companies and are designed to cover participants' Medicare Parts A (hospital insurance) and Part B (medical insurance) benefits. Many plans offer additional types of coverage as well, such as prescription drugs, dental, or vision benefits. Since these plans are not well understood by many seniors -- especially those who are just reaching the age of Medicare eligibility -- here are five rules you should keep in mind when considering a Medicare Advantage plan.
1. Make sure you can keep seeing your doctor
Since Medicare is widely accepted, and Medicare Advantage plans are offered by private insurance companies and have their own networks, it's important to realize that your current doctor(s) who accept Medicare may not be considered "in-network" by your new plan. Assuming you like your doctors and want to continue to see them, this is an important thing to research before you sign up for a Medicare Advantage plan.
Image source: Getty Images.
If your doctors are outside of your Medicare Advantage plan's network, it could become prohibitively expensive to continue to use their services.
2. Know your plan's total cost
A common mistake is to look for the Medicare Advantage plan with the lowest premiums, but it's important to consider the total cost of each plan. A plan with little or no monthly premium might look extremely attractive on the surface, but be sure to take a look at copays, coinsurance, and the deductibles you'll have to pay. You might be surprised at how high the deductibles on some low-premium Medicare Advantage plans can be.
Also, if you plan to enroll in a plan that offers additional benefits such as dental or vision coverage, be sure to consider the out-of-pocket costs of those services as well.
3. Be aware of when you can sign up for or make changes to your Medicare
If you're just reaching age 65, the same initial enrollment period that applies to original Medicare (Parts A and B) applies to your Medicare Advantage eligibility. In this case, your enrollment period is the seven-month period that starts three months before the month in which you'll turn 65.
If you're past your initial enrollment period, the open enrollment period for Medicare Advantage runs from Oct. 15 through Dec. 7 each year. During this period, you can switch from original Medicare to a Medicare Advantage Plan, or vice versa. You can also change from one Medicare Advantage Plan to another, join or switch a Medicare Prescription Drug Plan, or drop your prescription drug plan completely.
Finally, if your goal is to leave your Medicare Advantage Plan and switch back to Original Medicare, the Medicare Advantage Disenrollment Period runs from Jan. 1 through Feb. 14 each year. Note that you can do this during the Medicare Advantage open enrollment period as well.
4. If you sign up for a Medicare Advantage plan and are unhappy
Generally speaking, enrollment, changes, and disenrollment must be done during the enrollment periods I discussed earlier.
However, there are special rights that apply to people who join a Medicare Advantage plan for the first time and aren't happy with it. In this case,
- If you had a Medigap policy before you joined, you can get it back after dropping your Medicare Advantage Plan. However, your Medigap plan cannot have prescription drug coverage any longer (but you may be able to purchase a Medicare Part D prescription drug plan).
- If you joined a Medicare Advantage Plan when you first became eligible for Medicare, you can choose any available Medigap policy.
5. Know what Medicare Advantage providers cannot do
It's an unfortunate fact, but Medicare fraud is alive and well. If you're in the market for a Medicare Advantage plan, it's important to know one simple principle to avoid being victimized.
Simply put, Medicare Advantage plan providers are not allowed to call you unless you've asked them to. They also are not allowed to come to your home uninvited to try and sell you a Medicare Advantage plan or any other Medicare-related product for that matter.
In addition, here are some of the other rules anyone representing a Medicare product (such as Medicare Advantage) are required to follow.
- Medicare Advantage plans shouldn't ask you for your personal financial information, such as your bank account number or Social Security number, over the phone.
- Plans cannot offer you cash or gifts to get you to join their plan.
- Plans cannot ask you for payment over the phone or through email. You must be sent a bill.
- Sell you other products, such as an annuity, during a Medicare Advantage sales pitch.
