Medicare Advantage is an alternative to regular Medicare created by Congress in an attempt to cut costs in 1997. It is a managed care plan administered by a private provider instead of state governments. It has certain pros and cons when compared with regular Medicare. Read on to learn about Medicare Advantage and see if it is right for you.
Medicare Advantage patients are generally subject to a small copayment whenever they see a doctor, after which the visit is completely covered. This is in contrast to having to pay a deductible and then coinsurance – typically 20 percent – which is usually the case under regular Medicare. This generally eliminates the need for a supplemental Medigap policy.
Another attractive feature of Medicare Advantage plans is that they usually cover products and services not covered by regular Medicare, such as prescription drugs and custodial care. Some also cover hearing and vision care, gym memberships, and other services.
These perks do not come without a cost. The primary method by which Medicare Advantage plan providers reduce expenses is limiting the doctors and other providers that a patient can see to a particular network. If a patient voluntarily sees out-of-network providers, they must pay the full cost. However, if a patient’s in-network physician orders medical services not offered by any in-network provider, the Medicare Advantage plan is required by law to pay for those services at an out-of-network provider as long as those services are normally covered by Medicare.
Another cost-cutting measure is to prohibit patients from seeing specialists on their own; patients must be referred to specialists by their primary care physicians. However, plan administrators strongly discourage physicians from referring patients to specialists unless it is absolutely necessary.
These are the primary differences between regular Medicare and Medicare Advantage. If you need to reduce your medical costs and do not mind having to see only in-network health care providers, Medicare Advantage may be right for you.
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