Lesson 3: What is Medicare Advantage?
Welcome back.
In lesson three, we will be dissecting Medicare Advantage Plans and how they work. We will review everything you need to know. Medicare Advantage Plans are also known as Medicare Part C. These plans are managed care plans that cover Medicare Part A and B benefits and usually include Medicare Part D Prescription Drug coverage as well. Medicare Advantage Plans are an alternative way to receive Medicare coverage. Medicare Advantage Plans are also administered through private insurance companies that Medicare has approved. These plans usually bundle in the benefits of Medicare Part A and B and usually include a Part D Prescription Drug coverage as well. These plans do require you to be enrolled in Medicare Part A and B and you must continue to pay your Part B premium of $164.90.
Since Medicare Advantage Plans are sold through private insurance companies, beneficiaries will no longer be using their red, white and blue Medicare card as those benefits are being replaced by the Medicare Advantage Plan. Since Medicare Part C is offered through private insurance carriers, you can receive extra benefits above what Medicare covers.
Benefits can include things like dental vision, hearing, travel coverage, transportation, meal services, fitness benefits, over the counter benefits, a nurse line, and much more.
Medicare Advantage Plans must follow certain rules set by Medicare, but they can also establish their own set of coinsurance, copays and cost share that the beneficiary is responsible to pay for covered services. Medicare Advantage plans have cost sharing as well. Typically this is in the form of a fixed copay for doctor visits rather than the standard 20% coinsurance you pay for Original Medicare.
Medicare Advantage Plans are offered through private insurance carriers and must cover Part A and Part B benefits. They must also provide cost sharing equivalent to Original Medicare, include a maximum out-of-pocket limit or MOOP for short, and they must include emergency service,s and out of area urgently needed services and dialysis. Individuals are eligible to enroll into a Medicare Part C Medicare Advantage Plan if they are enrolled in Medicare Part A and B and live in the plan service area.
Medicare Supplement Plans are available on a per state basis, however, Medicare Part C, or Medicare Advantage, those plans are available on a per county basis. So you could have a Medicare Advantage Plan available in your county, but it not be available in the county next.
Most Medicare Advantage members typically remain in the same plan all year long because they do not have the eligibility to change plans throughout the year. However, this isn’t always the case for all beneficiaries. Beneficiaries who are dual eligible can change plans once per quarter during the first three quarters of the year. Don’t worry, we’ll dive deep into dual eligible in just a few.
The most common times that a beneficiary will enroll into a Medicare Part C Medicare Advantage Plan are when they are new to Medicare, during the annual enrollment period, and when they have lost credible coverage due to no fault of their own.
When a beneficiary first becomes Medicare eligible, this starts their Initial Enrollment Period, or IEP for short. This election period will last a total of seven months, starting three months before their 65th birthday, the month of and three months after their 65th birthday. If the beneficiary completes an enrollment form before the month of eligibility, the effective date will be the first day of the month for their eligibility, which is their birthday month. If the enrollment form is completed after their eligibility date, the effective date will be the first of the month following the receipt of enrollment during the fall. I’m sure you’ve all seen those commercials for exciting new benefits for Medicare beneficiaries. This is due to the Annual Election Period, or AEP for short. This election period is open from October 15 through December 7 of each year. All effective dates for the plans elected during that time will have an effective date for January 1.
Beneficiaries during that time may enroll, disenroll, or change plans as many times as desired. The final enrollment form submitted on or before December 7 will be the plan that goes into effect.
After the Annual Election Period, you have OEP, which stands for the Open Enrollment Period. This election period is open from January 1 through March 31 of each year. All plans elected at this time will have an effective date for the first of the month following the receipt of enrollment. During the Open Enrollment Period, beneficiaries may disenroll from a Medicare Advantage Plan and return to Original Medicare and enroll into a Part D Prescription Drug Plan. Or, beneficiaries enrolled into a Medicare Advantage Plan may make a one time switch to another Medicare Advantage Plan.
There are many marketing regulations regarding the Open Enrollment Period, so OEP cannot be discussed directly in advertisements or marketing strategies.
If a beneficiary wants to change plans outside of AEP and OEP, a beneficiary would have to qualify for a Special Enrollment Period, or an SEP for short. Some of the common SEPs include a beneficiary moving outside of their plan service area, having their Medicare Advantage Plan pull out of the county they’re in, or if they are losing their group insurance coverage. When you are completing an enrollment outside of the Annual Enrollment Period, you will see a list of different SEPs so you will be able to see if your client in fact, does qualify for a Special Enrollment Period.
Most Medicare Advantage Plans use contracted doctors, hospitals and other healthcare providers to provide affordable care for their members. They are known as networks. It is important to make sure that your clients preferred doctors and hospitals are in network when recommending a plan.
Medicare Advantage Plans have different plan types, ranging from HMO plans, which generally requires the use of doctors and hospitals within the plan’s network to receive coverage services and requires a referral to see a specialist. Then, you have PPO plans that allow members to go to any doctor or hospital that accepts Medicare, but they will pay less if they go to a provider and network. There is also an HMO-POS option that stands for the Point of Service, which allows members to go to non-network doctors and hospitals generally without receiving prior approval for certain services. Lastly, there is a PFFS option, which stands for Private Fee for Service. This is a plan where members can receive covered services from any doctor or hospital who is eligible to provide Medicare service, and they must agree to accept the plan’s Terms and Conditions.
Now that we have discussed Medicare Advantage Plans, let’s talk about Special Needs Plans, or SNPs for short. These plans are a type of Medicare Advantage Plan, like an HMO or PPO. Special Need Plans, (or SNPs) limit membership to people with specific diseases or characteristics. Medicare Special Needs Plans tailor their benefits, provider choices and drug formularies to best meet the specific needs of the groups they are trying to serve.All special needs plans must provide Part D Medicare Drug coverage.
The three different special needs plans are Dual Eligible Special Needs Plans or D-SNPs for short, Chronic Special Needs Plans, or C-SNP for short, and Institutionalized Special Needs Plans, or I-SNPs for short.
One thing about these three plans; they all require a primary care physician. The doctor they choose will be their main healthcare provider and act as their care coordinator, managing all the care in their Special Needs Plan’s Network.
A Dual Special Needs Plan, or D-SNP, is a Medicare Advantage Plan that serves beneficiaries that are both Medicare and Medicaid eligible. So just remember dual as both Medicare and Medicaid. To qualify for a D-SNP plan, you must receive Original Medicare Parts A and B and full Medicaid benefits. Depending on the amount of Medicaid a beneficiary is receiving, they may be considered a full Dual Eligible or a partial Dual Eligible. Most of the time, individuals who qualify will receive a letter from their state Medicaid office.
Dual Special Needs Plans have a unique enrollment window and guidelines compared to standard Medicare Advantage Plans, which yield a year round selling opportunity outside of AEP and OEP for agents. Individuals Dual Eligible can make a coverage change once per quarter during the first three quarters of the year. Premiums, copays, coinsurance and deductibles may vary based on the level of extra help a beneficiary is receiving.
A Chronic Special Needs Plan, or C-SNP for short, is a Medicare Advantage Plan designed for people with severe or disabling long-term health problems. Some plans are designed only for people with certain chronic conditions, such as diabetes or chronic heart failure.
There are 15 Special Needs Plans specific for chronic conditions that are approved by the Center for Medicare and Medicaid Services.
Chronic Special Needs Plan’s availability varies from company to company. You will need to check directly with a plan provider to see if they offer one that meets the beneficiary specific healthcare needs.
An institutionalized Special Needs Plan, or I-SNP for short, is a Medicare Advantage Plan for individuals who reside in any form of a long-term care facility. These plans are for people who have had or are expected to need, for 90 days or longer, the level of services provided in a long term care facility.
Well, that wraps up our lesson on Medicare Advantage before we move on to our last session, understanding Part D Prescription Drug Plans. Take this short quiz to test your knowledge!