7 facts about Medicare Advantage plans every retiree needs to know

Medicare Advantage is often referred to as Medicare Part C. It is privately obtained supplemental Medicare coverage that is regulated by Medicare and rated by CMS. Medicare Advantage plans are very popular with seniors who are not working any longer, who have reasonable means (not below the poverty line) and for those seeking more coverage and more control over their health insurance.

If you think you’ll need longer hospital stays, Medigap and Medicare Original coverage might be less expensive…

In 2020, virtually all Medicare Advantage enrollees would pay less than the Part A hospital deductible for an inpatient stay of 3 days. But for stays of 5 days, among the half of Medicare Advantage enrollees required to pay more than the beneficiaries in traditional Medicare, those enrollees would pay $1,644 on average. Nearly two-thirds (64%) of Medicare Advantage enrollees are in a plan that requires higher cost-sharing than the Part A hospital deductible in traditional Medicare for a 7-day inpatient stay, and more than 7 in 10 (72%) are in a plan that requires higher cost-sharing for a 10-day inpatient stay.

Nearly two-thirds of Medicare Advantage enrollees pay no supplemental premium (other than the Part B premium)

in 2020. 90% of Medicare Advantage plans offer prescription drug coverage and 89% of Medicare Advantage recipients are enrolled in plans that include Rx drug coverage. Nearly two-thirds of these beneficiaries (60%) pay no premium for their plan, other than the Medicare Part B premium ($144.60 in 2020).

Premiums paid by Medicare Advantage enrollees have slowly declined since 2015.

Nationwide, average Medicare Advantage Prescription Drug (MA-PD) premiums declined by $4 per month between 2019 and 2020, much of which was due to the relatively sharp decline in premiums for local PPOs this past year. Average premiums for HMOs also declined $3 per month, while premiums for regional PPOs increased $3 per month between 2019 and 2020. Nearly two-thirds (61%) of Medicare Advantage enrollees are in HMOs, 33% are in local PPOs, and 5% are in regional PPOs in 2020.

For Medicare Advantage enrollees, the average out-of-pocket limit is $4,925 for in-network services

In 2020, Medicare Advantage enrollees’ average out-of-pocket limit for in-network services is $4,925 (HMOs and PPOs) and $8,828 for out-of-network services (PPOs). These out-of-pocket limits apply to Part A and B services only and do not apply to Part D spending. HMOs generally only cover services provided by in-network providers, whereas PPOs also cover services delivered by out-of-network providers but charge enrollees higher cost-sharing for this care.

Medicare Advantage enrollees have access to benefits not covered by traditional Medicare

Medicare Advantage plans provide supplemental benefits that are not offered in traditional Medicare. Plans can also charge additional premiums for such benefits. Beginning in 2019, Medicare Advantage plans have been able to offer additional supplemental benefits that were not offered in previous years. These supplemental benefits can include: eye exams or glasses (79%), telehealth services (77%), dental care (74%), a fitness benefit (74%), and hearing aids (72%).

Medicare Advantage enrollees require prior authorization for some services

Medicare Advantage plans require enrollees to receive prior authorization before a service will be covered. Prior authorization is most often required for inpatient hospital stays, skilled nursing facility stays, and Part B drugs. Prior authorization is, however, rarely required for preventive services.

The majority (78%) of Medicare Advantage enrollees are in plans that receive high quality ratings (4 or more stars) and related bonus payments

For many years, CMS has posted quality ratings of Medicare Advantage plans to provide beneficiaries with additional information about plans offered in their area. All plans are rated on a 1 to 5-star scale, with 1 star representing poor performance, 3 stars representing average performance, and 5 stars representing excellent performance. In 2020, more than three-quarters (78%) of Medicare Advantage enrollees are in plans with quality ratings of 4 or more stars, an increase from 2019 (72%).

Medicare coverage can be complex and finding the right plan for you is a lot easier with the help of professionals. Reach out to our team to get the help you need at no cost to you!

*Information in this article was obtained from https://www.kff.org/medicare/issue-brief/a-dozen-facts-about-medicare-advantage-in-2020/