Medicare Advantage Plans, also known as Medicare Part C or MA Plans, are an alternative coverage option to Original Medicare Parts A and B.
These plans do not supplement Original Medicare. They are health plans offered by Medicare-approved private companies that must follow rules set by Medicare. Medicare pays a fixed amount each month to the company offering that plan for coverage of each beneficiary enrolled. These plans offer coverage for Medicare Part A and Part B services and some plans may offer coverage for things Original Medicare doesn’t cover (such as routine dental or vision services, hearing aids, wellness programs, etc.). These plans may or may not include a Medicare Part D Prescription Drug Plan.
Medicare beneficiaries considering enrolling in a Medicare Advantage Plan should understand the costs associated with that plan as each plan’s cost structure may differ from Original Medicare.
Medicare Advantage Plans have yearly contracts with Medicare. Each year the plans set the amount they charge for premiums, deductibles, covered service copayments/coinsurance. Plans must notify current members by sending out an Annual Notice of Change (ANOC) in September, before the start of the Annual (Fall Open) Enrollment Period for the coming year.
In many cases, the beneficiary needs to use health care providers who participate in the plan’s network and service area for the lowest costs. These plans set a limit on what the out of pocket costs are each year for covered services, which helps the beneficiary to plan their budgets. Some plans offer out-of-network coverage, but sometimes at a higher cost. Providers can join or leave a plan’s provider network at any time. The plan can also change the providers in their network at any time. A new provider may need to be selected if either of these situations occur.
The best way to get all the facts regarding any plan is to review the plan’s Evidence of Coverage. This plan document describes in detail the plan’s benefits, how much the beneficiary will pay, how the plan works (including networks, coverage limits, prior authorization rules, etc.). To access this document, go to the plan’s website and search for plan’s Evidence of Coverage link (usually a PDF document).
CAUTION: Television and Print Advertising
Marketing of Medicare Insurance Options
In general, the purpose of these ads is the solicitation of insurance, to get the beneficiary to take action, to call the number on the screen (or the number on the card/letter). While the information presented in these ads about costs and benefits may be true, to the extent that it was said, there is much left unsaid and that is the important information a person needs to know to make an informed decision about their health care coverage, especially understanding how switching to another plan will affect a person’s current insurance coverage. All beneficiaries are encouraged to go beyond beyond the advertisements to get the facts about the insurance options available to them.
Types of Medicare Advantage Plans
Beneficiaries have several types of Medicare Advantage plans to choose from. All Advantage Plans must follow Medicare rules and cover all Medicare Part A and B services. How the plans pay benefits for those services depends on the plan. These plans may or may not also include a Part D prescription drug plan. Medicare Advantage Plans are based on geographic locations and all plans are not available in all Wisconsin counties.
Health Maintenance Organizations (HMO) – beneficiaries generally must get care and services from providers (doctors, specialists, hospitals) in the plan’s strictly defined network (except emergency care, out-of-area urgent care, or out-of-area dialysis); may need a referral from the primary care doctor to see a specialist.
Point of Service (HMO-POS) – this option is available with some HMO plans which allows the beneficiary to go out-of-network for certain services, but the out-of-pocket costs may be higher.
Preferred Provider Organizations (PPO) – local and regional – PPO’s have a defined network of providers, but beneficiaries can use out-of-network providers (if those providers will accept the plan), usually with higher out-of-pocket costs.
Private Fee-for-Service Plans (PFFS) – beneficiaries can go to any Medicare-approved provider that accepts the plan’s payment terms and agrees to treat them. Not all providers will. [If a beneficiary joins a PFFS Plan that has a network, they can also see any of the network providers who’ve agreed to always treat plan members. They can choose an out of network doctor, hospital, or other provider who accepts the plan’s terms, but may pay more.] If the plan does not offer drug coverage, can have a separate Medicare Part D drug plan.
Special Needs Plans (SNP) – beneficiaries generally must get care and services from providers in the plan’s network (except emergency care, out-of-area urgent care, or out-of-area dialysis); may need a referral from the primary care doctor to see a specialist. All SNP’s must provide Medicare Part D prescription drug coverage.
SNPs provide focused and specialized health care for specific groups of beneficiaries and therefore limit plan membership to people in one of the following groups:
- Institutional SNP (I-SNP): Those living in certain institutions (like a nursing home), or who require nursing facility-level of care at home
- Dual Eligible SNP (D-SNP): Those eligible for both Medicare and Medicaid
- Chronic Condition SNP (C-SNP): Those with specific chronic or disabling conditions (e.g. cancer, diabetes, cardiovascular disorders)
Medicare Medical Savings Account Plans (MSA) – combines a high-deductible Medicare Advantage health plan with a special savings account in which Medicare deposits money (generally at the beginning of each year) for the beneficiary to use to pay for health care services. Only the plan can make deposits into the MSA account; plan enrollees cannot deposit their own money. The amount of deposit can change each year and may also earn interest. Any money left in the account at the end of the year will remain in the account and will be added to the new deposit the following year if the enrollee choses to continue enrollment. An MSA plan must, after the enrollee has met the plan deductible, cover in full all original Medicare Part A and B services for the remainder of the year. These plans do not offer a Part D Prescription Drug benefit. Beneficiaries are not eligible to enroll in this plan if enrolled in a Federal Employee Health Benefits program, eligible for VA benefits, or are dual eligible (Medicare/Medicaid).
Medicare Advantage Plan Eligibility
To be eligible to enroll in a Medicare Advantage plan, a person must:
- Be enrolled in Medicare Part A and Part B (continuing to pay monthly premiums)
- Live in the plan’s service area
- Be a U.S. Citizen (or lawfully present in the U.S.)
Eligible enrollees must be accepted into the plan regardless of any health condition. Medicare Advantage plans may deny enrollment if the plan has reached its capacity limit.
Medicare Advantage Plan Election (Enrollment) Periods
There are specific timeframes in which a beneficiary may join, switch, or drop a Medicare Advantage Plan. These are called the "Enrollment Periods" or "Special Enrollment Periods."
Before a decision is made whether to join, switch or drop an Advantage Plan, all options and timelines need to be understood so the "one time" election is not used up in each enrollment period.
Initial Coverage Election Period (ICEP) – When first eligible for Medicare, a decision needs to be made by the beneficiary to remain in Original Medicare or to join a Medicare Advantage Plan. The ICEP begins 3 months before starting Medicare, includes the month Medicare begins, and ends 3 months after Medicare begins (7-month time span). Once an ICEP election is made and enrollment takes effect, the ICEP ends. [IMPORTANT NOTE: The ICEP and the IEP for Part D occur together as one period when a person has enrolled in BOTH Part A and B at first eligibility, so it is important to make the drug coverage election at the same time.]
Annual Election Period (AEP) – The AEP, also known as the Medicare “Open Enrollment Period”, runs from October 15 through December 7 each year. Plan choices become effective January 1 of the following year. During the AEP, any Medicare beneficiary may join, switch or drop an Advantage Plan. Note: The last election request made during the AEP, determined by the application date, will be the plan that becomes effective in January. (During the AEP, an election regarding a Medicare Prescription Part D Drug plan may also be made).
Medicare Advantage Open Enrollment Period (MA-OEP) – From January 1 through March 31 of each year is the MA-OEP. Beneficiaries must already be in an Advantage Plan on January 1 to use this enrollment period. [New Medicare Beneficiaries who enroll in an Advantage Plan during their ICEP, will have an extended MA-OEP, based on Medicare entitlement dates.] Enrollees may switch from an Advantage Plan (with or without a Medicare Part D drug plan) or disenroll from an Advantage Plan and return to Original Medicare (with or without a stand-alone Medicare Part D drug plan). Only one election may be made during the MA-OEP. The changes will become effective the first of the month after the month the election is made. If a beneficiary returns to Original Medicare, they may want to cover Medicare out of pocket costs by purchasing a Medigap Insurance (Supplement) Policy; however, they can be denied coverage due to medical underwriting.
Special Election Period (SEP) – There are circumstances which provide a beneficiary the right to add, switch or drop their Advantage Plan on a one time, limited, or ongoing basis outside of the ICEP, AEP, or MA-OEP. These are called Special Election Periods. Relocation outside of the beneficiary’s current plan’s service area, plan termination, or being eligible for both Medicare and Medicaid are examples of situations that may generate a SEP. What changes a person can make and when depends upon the specific SEP being used.
Federal Trial Periods (SEPs) – These are one-time SEPs. If a beneficiary chooses to enroll in an Advantage Plan when first starting Medicare at age 65 (SEP65) or if switching from Original Medicare and a Medicare Supplement, at any age, to join an Advantage plan for the first time they will have a Trial Period SEP to disenroll from the Advantage Plan, outside of the AEP or MA-OEP, and return to Original Medicare. A Trial Period SEP may be used only once during their first 12 months of enrolling into their first Advantage Plan. If used, the beneficiary will return to Original Medicare and will have a Guaranteed Issue right of 63 days to purchase a Medicare Supplement Policy.
[Note: The State of Wisconsin recognizes a "special state trial period" where if a beneficiary leaves employer sponsored coverage to enroll in a Medicare Advantage Plan for the first time, they have a 12-month trial period. However, the beneficiary may only disenroll from the Advantage Plan during a recognized election period (e.g. AEP, MA-OEP or SEP). They will then have a Guaranteed Issue right of 63 days to purchase a Medicare Supplement Policy.]
Five (5) Star (SEP) – A beneficiary may join an Advantage Plan or Prescription Drug Plan with a performance rating of 5 stars at any time between December 8 - November 30 each year. This SEP may be used only once each year. The beneficiary must meet other basic requirements to join an Advantage Plan with coverage effective the first of the month following the month in which 5 star plans receive an enrollment request. As not all 5 star plans include Medicare Part D Prescription drug coverage, before enrolling be sure to understand how that enrollment may affect current drug coverage.
Special Note Regarding Medicare Medical Savings Account (MSA) Plan Enrollments:
Individuals may enroll in Medicare MSA Plans only during the ICEP or the AEP. The only SEP available is for enrollment in an employer sponsored MSA Plan. May disenroll from MSA Plan only during the AEP or a SEP. MSAs are not included in the MA-OEP.
Medicare Website – Plan Finder Tool
(to compare plan options within a certain zip code):