Medicare Advantage plans may give you some discounts or pay for services that Original Medicare may not cover. But there are drawbacks, too. One is the cost: you will likely pay more for these extra benefits.
Another is that you may be locked into your plan's rules. Original Medicare allows you to see just about any doctor and go to any hospital that accepts Medicare payments, which most providers accept. But Medicare Advantage plans may restrict you to the doctors and hospitals in the plan's network. You might need referrals to see a specialist. Also, Medicare Advantage does not cover hospice care.
So you have to look hard at what sort of medical coverage you need -- and what you can afford -- when deciding between Original Medicare and a Medicare Advantage plan.
To get a Medicare Advantage plan, you must already have Medicare Part A and Part B. If you're 65 and receive Social Security checks, you're automatically enrolled for Part A and Part B.
You will have many Medicare Advantage plans to choose from. Some work like typical HMOs (health maintenance organizations), while others are designed specifically for people with special needs and vary from region to region. To learn what's available in your area, use the online Medicare Personal Plan Finder.
While you won't need to pay a Part A premium, you will need to pay the "standard" Part B monthly premium, which will rise to $104.90 in 2013, or $5 more than the 2012 premium for new enrollees. People with higher incomes (household income over $170,000) will pay higher premiums on a sliding scale, with adjustments ranging from $42.00 to $230.80 more per month. The maximum premium will be $335.70.
On top of that, you'll have to pay a monthly premium for your Medicare Advantage plan. The average premium will increase by $1.47 from 2012, to $32.59, according to the U.S. Department of Health and Human Services. The price varies depending on your plan. Sometimes, there might be more premiums to cover prescription drugs or other additional services.
Here are other facts to consider before enrolling in a Medicare Advantage plan:
- There are restrictions on when you can join or leave the plan. If you opt for a 5-star plan as rated by Medicare, you may switch to such a plan (if there is one in your area) from Dec. 8, 2012, to Nov. 30, 2013. Otherwise, you may join a Medicare Advantage plan during your initial enrollment period, which spans the three months before and the three months after the month you turn 65.
- After that, you may join, switch, or drop your coverage during the "open enrollment period" between Oct. 15 and Dec. 7, with coverage kicking in Jan. 1. Then, between Jan. 1 and Feb. 14, you may switch to Original Medicare. Keep in mind that if you drop your Medicare Advantage plan, you have only until Feb. 14 to join a Medicare Prescription Drug Plan to add drug coverage. During the Jan. 1-Feb. 14 period, you can't re-enroll in a Medicare Advantage plan, switch from one Medicare Advantage plan to another, switch from one Medicare Prescription Drug Plan to another, or drop a Medicare Medical Savings Account plan.
- If you get Medicare due to a disability, you can join during the 7-month period that begins 3 months before your 25th month of disability and ends 3 months after your 25th month of disability.
- If you are in a Medicare Advantage plan, you shouldn't need -- and can't get -- a Medigap policy. Medicare Advantage plans should cover the same benefits that Medigap plans do. Keep in mind that if you have a Medigap policy and join a Medicare Advantage plan, you may lose the Medigap policy permanently.
- If you're in a Medicare Advantage plan that offers prescription drug coverage, you cannot sign up for a Medicare Prescription Drug Plan.
- You may not be able to get a Medicare Advantage plan if you have end-stage kidney disease.
- For more information about Medicare Advantage plans, see the Medicare web site at www.medicare.gov or call 800-MEDICARE.