Medicare Advantage Plans
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Medicare is a federal health insurance program that provides health care benefits for people who are 65 and older. It also pays for health care for people who are eligible because of a disability or qualifying health condition.
Medicare Part A (hospital coverage) pays for
- in-patient hospital services,
- skilled nursing facility care after a hospital stay,
- home health care,
- hospice care, and
- all but the first three pints of blood each calendar year.
Medicare Part B (medical coverage) pays for
- medically necessary doctors’ services,
- clinical laboratory services and tests,
- outpatient care,
- medical equipment, supplies, and home health care, and
- preventive health services, including exams, lab tests, health screenings, and shots.
Medicare Part C (Medicare Advantage) must offer at least the same benefits as original Medicare parts A and B and may offer additional coverage. Most Part C plans include prescription drugs.
Medicare Part D (prescription drug coverage) pays for generic and brand-name prescription drugs. You can get prescription drug coverage either by joining a stand-alone prescription drug plan or by buying a Medicare Advantage plan that includes drug coverage. If you have group health coverage that provides prescription coverage, ask your plan whether you need Medicare Part D.
Only private insurance companies approved by Medicare may offer parts C and D coverage.
People get Medicare parts A and B benefits through either original Medicare or Medicare Advantage plans. Original Medicare is sometimes called traditional Medicare or Medicare fee-for-service. You may go to any doctor or hospital you want, as long as the doctor or hospital accepts Medicare patients.
This publication provides basic information about Medicare Advantage plans, what they are, how they provide benefits, and where to get more information and assistance. The official source for information about Medicare Advantage plans is the federal Centers for Medicare and Medicaid Services (CMS). Each year, CMS publishes the annual Medicare & You handbook. The handbook includes a list of Medicare Advantage plans available for the coming year.
Depending on where you live, you may be able to join a Medicare Advantage plan. Medicare Advantage is an alternative to original Medicare. It's sometimes called Medicare Part C. If you join a Medicare Advantage plan, the plan will provide your Medicare parts A and B benefits. If you are in a Medicare Advantage plan, you are no longer in original Medicare but still have the same rights and protections as people with original Medicare.
If you have other insurance, such as retirement insurance, consider how it will work with either original Medicare or Medicare Advantage before deciding which options to consider.
How Medicare Advantage Plans Work
Medicare approves annual contracts with insurance companies and managed care plans to offer Medicare Advantage plans in specific geographic areas. Medicare pays the plan a set amount each month, and the plan provides Medicare parts A and B services. Some Medicare Advantage plans require you to go to doctors in their networks.
Your out-of-pocket costs in a Medicare Advantage plan are different from what you would pay in original Medicare. You will continue to pay your monthly Medicare Part B premium, and you may have to pay a premium for the Medicare Advantage plan. You will also pay any copayments, deductibles, and coinsurance the plan requires.
Medicare Advantage plans usually have more benefits than original Medicare. For instance, some Medicare Advantage plans may cover dental and vision services. Some Medicare Advantage plans include Medicare Part D.
Medicare Advantage plans aren't right for everyone. Consider your options carefully before joining a Medicare Advantage plan.
Medicare Advantage Eligibility
To join a Medicare Advantage plan, you must live in the plan's service area, be enrolled in Medicare parts A and B, and usually not have end-stage renal (kidney) disease. A plan can't drop you if you are diagnosed with end-stage renal disease while you are in the plan. Medicare Advantage, Special Needs Plans have additional requirements.
You can only join or drop a Medicare Advantage plan during certain times. Outside of one of these periods, Medicare usually requires that you remain in the plan for a year. Even if you stop paying for a Medicare Advantage plan, you don't automatically go back to original Medicare and you can't pick up a stand-alone prescription drug plan. Be sure to read your member handbook on how to disenroll.
Open Enrollment Period. The Medicare open enrollment period is October 15 through December 7. It is your opportunity to compare coverages and make changes to your Medicare Advantage and Part D plans. If you make changes to your coverage during the open enrollment period, they will take effect on January 1.
During the open enrollment period, if you want to drop your Medicare Advantage plan and return to original Medicare, you must tell your plan in writing. If your Medicare Advantage plan includes medications, joining a stand-alone prescription drug plan will automatically return you to original Medicare. If you switch from one Medicare Advantage plan to another, you will be disenrolled automatically from your old plan when the new coverage begins.
Prior to open enrollment, Medicare will mail you its Medicare & You handbook. You can use that handbook or the Find Health and Drug Plans feature on www.Medicare.gov to see the available plans. The website is updated by October 15 of each year. If you are in a Medicare Advantage plan, the plan must also send you information about changes and costs for the coming year.
Disenrollment Period. The Medicare Advantage disenrollment period is January 1 through February 14. The disenrollment period allows you to leave your Medicare Advantage plan and return to original Medicare. You will not be able to join a different Medicare Advantage plan and may not be able to buy a Medicare supplement policy during this disenrollment period. If you disenroll from a Medicare Advantage plan, you have a right to enroll in a prescription drug plan.
Read the Medicare & You handbook for information about joining and switching plans. You may also call 1-800-Medicare. Medicare's representatives can verify if you have a right to leave your current plan.
Special Enrollment Periods. Certain situations allow you to change plans outside of the open enrollment period or disenrollment period. These include moving out of the area or moving into a nursing home. People with Medicaid, Medicare savings programs, or Extra Help for Medicare Part D have a right to change plans throughout the calendar year. To find out if your situation allows a special enrollment period call 1-800-Medicare (1-800-633-4227), or call the Area Agency on Aging (AAA) at 1-800-252-9240. Your call will be routed to the AAA office near you.
Five-Star Special Enrollment Period. CMS rates Medicare Advantage and prescription drug plans based on quality of care, access to care, responsiveness, and beneficiary satisfaction. Plans with the highest level of service are designated as five-star plans. You can switch to a five-star plan one time during the year. Your coverage with a five-star plan will begin on the first day of the month following your enrollment.
You can find a plan's rating online at the www.Medicare.gov by clicking on Find Health and Drug Plans or by calling 1-800-Medicare.
Medicare Supplement Insurance
Medicare supplement insurance – sometimes called Medigap – fills in the gaps between what original Medicare pays and what you must pay out-of-pocket for deductibles, coinsurance, and copayments. A Medicare supplement policy only works with original Medicare, not with a Medicare Advantage plan. If you drop a Medicare supplement policy to join a Medicare Advantage, you may not be able to buy another Medicare supplement policy if you later decide to return to original Medicare.
You may buy a Medicare supplement policy in the following situations:
- If you join a Medicare Advantage plan when you first enroll in Medicare Part B, you can drop your Medicare Advantage plan and buy a Medicare supplement policy during the first year. This is called a "trial right."
- If your Medicare Advantage plan ends its coverage, you have 63 days to buy a Medicare supplement policy. On the termination of your Medicare Advantage plan, the plan will provide you written information about your rights and options.
- If you have a Medicare supplement policy and have never enrolled in a Medicare Advantage plan before, you can drop your Medicare supplement policy to try a Medicare Advantage plan. If you leave the Medicare Advantage plan within the first year, you can have your Medicare supplement policy back. If the company no longer sells the Medicare supplement policy you previously had, you can buy certain policies from any company.
The Texas Department of Insurance offers a list of companies selling Medicare supplement policies in its Medicare Supplement Insurance Handbook. The CMS publication Choosing a Medigap Policy has additional information about your Medicare supplement rights.
Medicare Advantage Options in Texas
The Medicare Advantage options available in Texas include:
- managed health care plans, such as health maintenance organizations (HMOs),
- preferred provider organizations (PPOs),
- private fee-for-service (PFFS) plans, and
- Medicare special needs plans (SNPs).
Not all of these options are available in every county.
Health maintenance organizations. Medicare HMOs usually require you to use doctors and hospitals they have contracts with. These doctors and hospitals make up the HMO's "network." Some HMOs have an option called point-of-service that allows you to use doctors and hospitals who aren't in the HMO's network, but you'll have to pay more.
You must also choose a primary care physician who will oversee your health care and provide referrals to specialists.
Preferred provider organizations. Like HMOs, PPOs contract with networks of doctors and hospitals. Unlike HMOs, PPO members don't need a referral from their primary care physician to visit specialists or out-of-network doctors. However, your costs will be lower if you use the PPO's network of doctors and hospitals. Some services may still require prior approval.
Private fee-for-service plans. PFFS plans allow you to visit any doctor or hospital that accepts the plan's terms of payment. However, some PFFS plans are required to have a network of doctors and hospitals. If the PFFS plan has a network, you will probably pay more if you see a doctor or hospital outside the network.
Although you must live in the plan's service area to join a plan, you can receive treatment anywhere in the United States as long as the doctor or hospital is willing to treat you.
Special needs plans. SNPs provide health care for people with specific diseases such as heart disease or diabetes. To be eligible for a plan, you must have a health condition covered by the specific plan. In some cases, you may have to change your doctor or hospital if yours isn't willing to accept your plan. Some plans are specifically for people in long-term care facilities or for people eligible for both Medicare and Medicaid, also called dual-eligibles.Note: Some employers offer their retirees Medicare Advantage plans. Those plans may be different from the plans found in the Medicare & You handbook and may work differently. Because plans can change each year, be sure to check with your previous employer to understand your coverage.
How to Compare Medicare Advantage Plans
The best way to choose a Medicare Advantage or prescription drug plan is to use the Find Health and Drug Plans link on Medicare's website at www.Medicare.gov. This website compares the plans and their premiums, maximum out-of-pocket costs, basic service costs, and medications. The Medicare & You handbook can tell you all the Medicare Advantage and drug plans available in Texas.
If you don't use a computer or don't have someone who can help you, call 1-800-Medicare and say "agent" when prompted. You can also get local help by calling the AAA at 1-800-252-9240. You will need your Medicare information, information about other insurance, the names of your providers, and a list of medications you take.
- Premiums. Medicare Advantage plan members are responsible for their Medicare Part B premium and may pay an additional plan premium. Some plans may offer several premium options with different levels of benefits. Additionally, the cost for plans with prescription benefits will include the premium for the prescription plan.
Although the premiums for a Medicare Advantage plan may be less than that of a Medicare supplement policy, you also need to consider what your out-of-pocket costs are with the Medicare Advantage plan.
- Deductible. A deductible is an amount you must pay for medical services and prescriptions before your plan begins to pay. Once you meet your deductible, you will pay either a copayment or coinsurance.
- Copayments. Copayments are a set amount you pay for specific services covered by the plan.
- Coinsurance. Coinsurance is the percentage of the cost of a service that you pay after the plan pays its portion of the cost. For example, a plan might pay 85 percent of the cost of a covered service, while you pay the remaining 15 percent.
- Extra charges. Some PFFS plans allow doctors and hospitals to charge you a remaining balance for the services you receive. It is in addition to the amount you pay in copayments or coinsurance, and you'll have to pay it yourself. If you're considering a PFFS, be sure to find out whether the plan allows doctors and hospitals to charge you and for what amount they can bill. If you have a PPO and use out-of-network providers, the PPO will determine the allowable amount and how much the plan pays. You will owe the doctor or hospital any balances.
- Annual maximum out-of-pocket limits. This is the maximum or total amount you will pay towards the parts A & B costs. It doesn’t apply to your drug costs. You can find the out-of-pocket limits in the Medicare & You handbook and at www.Medicare.gov. In addition, plans can't charge more than what original Medicare would charge for administration of chemotherapy services, renal dialysis services, and skilled nursing care. Services your plan denied won't count toward the annual maximum out-of-pocket amount.
Things to Consider Before You Buy a Medicare Advantage Plan
- If you have other insurance - such as a group retirement plan, Medicaid, or TRICARE-for-Life, military retiree coverage find out whether and how the Medicare Advantage plan will work with it. Be sure to compare the costs and benefits of Medicare Advantage plans with your other coverage options.
- If you can't buy a Medicare supplement policy, you can generally enroll in a Medicare Advantage plan regardless of your health history, unless you have end-stage renal disease. A Medicare Advantage plan can't drop you if you are diagnosed with end-stage renal disease after you've joined the plan.
- People under age 65 in original Medicare only have the option to purchase Medicare supplement Plan A. Medicare Advantage plans may offer more services at a lower cost than Medicare supplement Plan A.
- Most Medicare Advantage plans have a network of doctors and hospitals you must use. Be aware that doctors and hospitals can join or leave the network any time during the year. If this happens, you may need to choose a new doctor or hospital.
- Plans can legally deny payment for covered services if you didn't follow their rules.
- Some plans require that you use their doctors and hospitals for all nonemergency care. Most plans also require prior authorization before covering certain services.
- Medicare Advantage plans negotiate contracts each year. Your plan could leave Medicare or change its benefits, premiums, and copayments at the end of each year.
- If you enroll in a Medicare Advantage or Medicare Part D plan outside of an annual enrollment period, you may not be able to drop the plan until the next year.
If you need help comparing a Medicare Advantage plan with original Medicare or other options, call your local AAA office at 1-800-252-9240. AAA offices provide free one-on-one counseling about insurance and related issues.
Protect Yourself from Fraud
Beware of deceptive and fraudulent Medicare sales practices. If you think you've been the victim of fraud, report the marketing fraud to Medicare at 1-800-Medicare.
Here are some tips to help you protect yourself from fraud:
- Before joining a plan, always confirm with your doctor and hospital that they will accept the plan. Don't take a salesperson's word for it!
- Don't buy anything from a salesperson who comes to your home uninvited or pressures you into making a quick decision. It is illegal to sell Medicare Advantage plans door-to-door or to make unsolicited telephone calls.
- Don't be fooled if a salesperson claims to be with Medicare or Social Security, even if he or she shows you an official-looking identification card. Get their name and report them to 1-800-Medicare.
- Be careful about giving out your Medicare number or other personal information. An unethical salesperson can use this information to illegally remove you from original Medicare and enroll you in a Medicare Advantage plan without your knowledge.
- Don't sign anything you haven't read and don't fully understand. Agents are required to disclose in advance the product they are selling. Write down the salesperson's name, address, phone number, and what he or she told you.
- You shouldn't have a Medicare supplement policy and a Medicare Advantage plan.
It is illegal to sell insurance in Texas without a license. To verify a license, call the TDI Consumer Help Line at 1-800-252-3439 or visit our website at www.tdi.texas.gov.
Getting the Most from Your Medicare Advantage Plan
Understand your plan
Medicare Advantage plans must give you a member handbook when you enroll. Read your member handbook or evidence of coverage to know what and how services are covered and what out-of-pocket costs you will have to pay. Make sure you understand how the HMO or PPO handles regular appointments and visits to specialists. PFFS plans cover care anywhere in the United States as long as the doctor or hospital is willing to accept your plan's payment terms. Keep the plan's telephone numbers handy to call if you have questions.
Use the complaint and appeals process
If you aren’t satisfied with the care you received, first try to resolve the problem with your doctor or with the plan. If you have a question about a particular treatment you did or did not receive, ask your doctor for an explanation. If you still are not satisfied with the results, file a written complaint or grievance as outlined in your member handbook.
You can ask the plan for an advance coverage decision to make sure a service is medically necessary and will be covered. If the plan decides a service isn’t medically necessary, federal regulations give you the right to appeal the decision.
You have a right to several levels of appeal, including an expedited appeal (72-hour decision), for a denial of services or for payment for services. Read your member booklet for details about the appeal process.
For More Information or Assistance
For answers to general insurance questions, for information about filing an insurance-related complaint, or to report suspected insurance fraud, call the Consumer Help Line at 1-800-252-3439 between 8 a.m. and 5 p.m., Central time, Monday-Friday, or visit our website at www.tdi.texas.gov.
For printed copies of consumer publications, call the Consumer Help Line.
To report suspected arson or suspicious activity involving fires, call the State Fire Marshal's 24-hour Arson Hotline at 1-877-4FIRE45 (434-7345).
The information in this publication is current as of the revision date. Changes in laws and agency administrative rules made after the revision date may affect the content. View current information on our website. TDI distributes this publication for educational purposes only. This publication is not an endorsement by TDI of any service, product, or company.
This publication has been created or produced by Texas with financial assistance, in whole or part, through a grant from the Centers for Medicare & Medicaid Services, the Federal Medicare agency.
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Last updated: 01/28/2015