Joanne (00:00):

When you're hearing about Medicare in the news, it is impossible to not hear about Medicare Advantage plans. But, when you look at social media, many people will say that they should be avoided at all costs, but is this true?

Cameron (00:10):

But before we answer that, my name is Cameron Giardini and together with my co-host Joanne Giardini-Russell, we operate Giardini Medicare, which is an independent insurance agency based out of Southeast Michigan. Although we are based in Michigan, we do work virtually over the phone to directly help consumers in about 13 states to find the right Medicare coverage for them. If we do not work in your state, we will still connect you with another trusted independent agent that can help you find the right coverage. And of course, even if you choose not to work with us, we know that the information in this podcast will help you have a successful and stress-free transition to Medicare. So with that out of the way, let me give you a quick overview of what we're going to talk about in today's episode. So what are Medicare Advantage plans? We will cover that. We will talk about the negatives of Medicare Advantage plans. That's what this is all about. And we'll talk about how to overcome some of the negatives with Medicare Advantage plans. Also, we'll mention what are the pros of Medicare Advantage plans and lastly, we will mention who they are right or potentially wrong for. But first I'll have Joanne start by giving you an overview of what Medicare Advantage plans are.

Joanne (01:10):

All right, so here they are, Medicare Advantage plans, sometimes referred to as Part C by the Medicare & You Handbook in particular. But these are private alternatives to Original Medicare. They're bundling all the benefits that people are going to receive from Part A, part B and then typically Part D prescriptions all into one package. They're managed care programs. They are offered by private insurance companies, and they do come in the form of an HMO or a PPO. They are typically going to require the use of specific networks of providers and hospitals and then they may actually require you to have prior authorization before getting certain medical care or certain prescriptions. Medicare Advantage plans have low monthly premiums, and they provide extra benefits that Medicare does not provide such as dental, vision, and hearing. But Medicare Advantage plans can potentially come with higher out-of-pocket overall medical costs. 

Joanne (02:07):

According to Medicare.gov while you are enrolled in a Medicare Advantage plan, you'll get most of your services for part A and part B coverage through your Medicare Advantage plan instead of Original Medicare. This means you can put your red, white, and blue Medicare card in a safe place in your home. Since when you get your medical care, you're going to present your Medicare Advantage card from your insurance company and not use your Medicare card, that red, white, and blue card because your Medicare Advantage plan is now your primary coverage. Please note though, that Medicare Advantage plans, do have to follow rules that are set by Medicare and they must cover the same services that are covered by original Medicare.

Cameron (02:42):

Yeah, I just want to highlight again what Joanne said to really drive that home. If you enroll in a Medicare Advantage plan, it is an alternative to Medicare. Just like she said, A lot of times you'll hear these called replacement plans. You're not really replacing your Medicare, you are getting that alternative coverage through the insurance company, but you're not losing your Medicare forever. It's just while you're enrolled in the plan, you put your Medicare card away. You don't need it for most services because when you go to the doctor you are presenting the advantage plan card from your insurance company. That is a huge barrier I think for some people to overcome as far as understanding how Medicare Advantage is different than traditional Medicare with Medicare supplement plans. So, with that comes some potential downsides of Medicare Advantage.

Cameron (03:24):

The biggest one Joanne already mentioned is prior authorization. According to the Kaiser Family Foundation, prior authorization is intended to ensure that healthcare services are medically necessary, and what they do is they require your provider to obtain approval before a service or other benefit is covered by your insurance. Another thing with Medicare Advantage plans you may run into are possible referrals to see a specialist. This will depend on your Medicare Advantage plan, but you may need to get a referral from your primary care doctor before seeing an in-network specialist. Another potential downside is provider networks. Because Medicare Advantage plans are an alternative to Medicare and they become your primary coverage, you will also have a network of providers that are contracted with your specific insurance company that provides the Medicare Advantage plan that you're enrolled in. Now keep in mind that provider networks can change at any time throughout the year even if you stay enrolled in the plan.

Cameron (04:18):

Also, Medicare Advantage plans, have potentially higher medical out-of-pocket costs. In 2023 the highest allowable in-network max out-of-pocket for a Medicare Advantage plan is $8,300 for the year for plan-approved services. Last but not least, another potential downside of Medicare Advantage is yearly contracts. So Medicare Advantage plans, are contracts that are set just for the calendar year. This is January through December. This means beyond the current calendar year, the copays and benefits for your plan can and likely will change. These can be minor or very large changes, it just depends on the plan and the year. So now Joanne can talk about what we can actually do about these negatives or what you can think about instead of just looking at the cons, think about what you can do knowing these cons.

Joanne (05:01):

Exactly. So what can you do about prior authorization? The plan will come with prior authorization. So the biggest thing to understand is that it exists and know what you can do is you can actually appeal a prior authorization decision that you disagree with. Another stat, according to the Kaiser Family Foundation, found that there were 35.2 million requests for prior authorization by insurance companies and 33.2 million of those requests resulted in the services being covered. This means that 6% of the total prior authorization requests were denied in part or in full. Only 11% of the denials were actually appealed. But of the ones that were appealed, 82% resulted in the initial denial being partially or fully overturned. So that is huge to know. If you have a denial, make an appeal.

Cameron (05:47):

Yeah, reach out to your agent. You know, that's where we as brokers into play and we'll just guide you through the next steps. Now we can't guarantee it will get overturned, but it's always worth trying.

Joanne (05:58):

82% is a pretty good shot, so it would be worth calling your agent for sure. A second potential thing that is deemed as negative to consumers could be referrals. So you might need a referral to see a network specialist. Remember that not all plans are going to require referrals. Even HMOs for a long, long time everyone thought an HMO absolutely requires a referral. Many HMOs do not require that anymore. So at least anecdotally referrals continue to become less common over time. Consider a PPO plan if you absolutely hate the idea or thought of a referral but know that seeing your primary care physician to consult with them is generally still a good idea since they are there to coordinate your overall healthcare. 

Cameron (06:36):

Yeah, sometimes it's tempting to want to go straight to a specialist, but it can still be useful just talking to your primary care physician and figuring out what they suggest. Because maybe they can skip some steps or you know, point you to a different specialist that you might not have thought of. And the copays for primary care visits with Medicare Advantage are very low, if not usually zero. So, what can you do about some other negatives that we talked about? What about provider networks? The biggest thing by far is just to check your doctors and hospitals when you're enrolling in a plan. Figure out does the plan you're enrolling in already covers the doctors and hospitals you use. Networks typically only become an issue when you don't check before enrolling because then you go to use the plan and you realize you might not be able to use it at your provider or at your hospital.

Cameron (07:20):

So ask yourself if you plan on going out of network or figure out if you want to be able to, if that's important to you, you may want to consider other options if your plan has a national network that can change how you think about traveling. So, if you want to go out of the network, you might want to consider a PPO plan or that might be where you might shift to a Medigap plan instead. Now, providers and hospitals can join or leave the network at any time of the year as we talked about, just know that's a potential risk that you really can't plan for. You just have to know it's there. Also, we talked about the potential for higher medical out-of-pocket costs, which certainly can be a con compared to Medigap plans. However, know that the maximum possible limit for in-network services is set to 8,300 by Medicare, but many plans have max out of pockets lower than this.

Cameron (08:05):

For example, in Michigan, most plans typically have a maximum out-of-pocket in-network of about $4,000 to $6,000 for the year. And know that this is an improvement over Original Medicare since there's no maximum out-of-pocket for covered services with Original Medicare and Michigan's middle-of-the-road when it comes to max-out-of-pockets. I mean there are places that are as low as $1,000 and some might be higher than that, but you’ll be able to find a plan with a lower maximum out-of-pocket than the actual max that's allowed of 8,300. Also, just keep in mind that Medicare advantage max out of pocket, they only apply to covered medical services. They're not going to apply to your prescription coverage or other benefits like dental vision or hearing. Lastly, what about the fact that Medicare Advantage plans are yearly contracts?

Cameron (08:53):

So unlike Medicare supplements, know that Medicare Advantage plans, will change yearly. Make sure to check your plans yearly. That's one thing you can do to combat it. Your plan will send you an annual notice of change in September and it will let you know of any upcoming plan changes. You can change from your current Medicare Advantage to another Medicare Advantage every year without health questions. So compare all of your options when necessary and just adjust accordingly. So again, understand they can change, and you can change with it. So it's not all negative. Let's talk about the pros of Medicare Advantage because obviously there have to be some good reasons people enroll in these.

Joanne (09:25):

Perfect, I get the good stuff, the positive stuff. So, the pros of Medicare Advantage, are they provide extra benefits that aren't normally covered by Original Medicare and that is why the plan can be very attractive to many people. Routine dental, vision, hearing, over-the-counter benefits, transportation, flex cards, you hear all these things on TV ads, right? Gym memberships, all these things are the services that you're going to commonly see advertised on TV in your postcards, your mail, and things like that. And they, they do exist. You must be careful. That doesn't mean they're all going to have every single one wrapped into one package, but they definitely do exist, and Original Medicare doesn't cover those things. Another big pro in my opinion of Medicare Advantage is the low monthly premiums. According to the Kaiser Family Foundation, in 2022, 69% of Medicare Advantage plans had zero monthly premiums.

Joanne (10:12):

And again, that's the monthly premium. That is not the total cost, it does not mean you will pay anything ever. It just means your premium monthly will be zero. 99% of Medicare beneficiaries have access to a zero-premium Medicare Advantage plan. So you very likely do in your zip code. Prescription drug coverage is typically included in the Medicare Advantage plan. This is almost always at no additional monthly cost to you, but you're still going to have out-of-pocket costs for those prescriptions. Your copays will not go away. Prescription drug coverage is included with Medicare Advantage Plan, and it is oftentimes stronger than a standalone Part D plan that would do, you would have to purchase with a Medigap contract.

Cameron (10:50):

Yeah, that's typical since a lot of Medicare Advantage plan drug coverages don't have deductibles. So just consider that and remember that the drug coverage is pretty strong with Medicare Advantage.

Joanne (11:00):

Good point. Maximum out-of-pocket. So, a Medicare Advantage plan, as Cameron referenced earlier, it has a max out-of-pocket that could go up to $8,300, but it does have a cap to it that does not exist with Original Medicare. There are over 5 million people out there with just Part A and Part B only, and they're exposed. If anything, put this Medicare Advantage plan in place and get a max out of pocket to protect your finances. Another great thing about a Medicare Advantage contract is you have the ability to change from one Medicare Advantage plan to another Medicare Advantage plan every single year with no health questions. Just remember that this can only be done during certain times of the year and then there are certain enrollment periods that you'll have to pay attention to.

Cameron (11:39):

Who are Medicare Advantage plans right for and who might they be wrong for? They're usually right for people that are eligible for Medicare due to disability and end-stage renal disease (ESRD), ALS pretty much those eligible for Medicare under age 65. The reason we say this is that in many states, Medicare Supplements for those people are very expensive to where they potentially even become unaffordable. So, I would typically recommend the Medicare Advantage plan in that case. However, you can still look at Medigap options. It just tends to skew towards Medicare Advantage for many people. If you are a military veteran and you tend to use the VA for most of your healthcare services, a Medicare Advantage plan can be a great option when you go outside of the VA. Also, if you're okay with prior authorization, just add that to the list of reasons you may be willing to have Medicare Advantage.

Cameron (12:24):

I would say probably the biggest thing that we run into is if you cannot comfortably afford the higher Medigap premiums, then you almost have to choose Medicare Advantage or you're more forced to that side of things because you don't want to pay the higher cost for Medigap premiums and even if you can afford it, some people just want the lowest possible premiums and you must understand that it comes with a potential for higher medical out-of-pocket cost. Also, if you're comfortable with a network of medical providers and you confirm your providers are part of the plan, that really becomes less of an issue. The last reason Medicare Advantage plans might be right for you is you might be somebody that wants extra benefits not covered by original Medicare like dental vision and hearing as Joanne talked about, and you don't want to buy additional insurance plans just to cover those benefits. Now I'll flip it back to Joanne and she can talk about who Medicare Advantage plans might potentially be wrong for.

Joanne (13:11):

And it could be wrong for people that do not want to deal with the potential of prior authorization. If you hate that idea, you have to understand that these plans may have this at some point in your life with your insurance. So then you may not want to enter a contract like that. It could be wrong for people that want to have the absolute lowest possible out-of-pocket cost, completely meaning I don't want to hit that max out of pocket. Maybe a Medicare Supplement's better because you have a set cost every month and you know your expenses. It could be wrong for beneficiaries looking to see any provider around the country that accepts original Medicare. Medicare Advantage plans do have PPOs for out-of-network coverage for sure, but out-of-network doctors still must agree to treat you in a non-emergency situation. So, they don't mean you can just go anywhere you want, so you don't have 100% freedom. Lastly, it could be wrong for people just those people planning on having Medicare Advantage while healthy and then you're trying to change to a Medigap plan later right before they get sick. It may not work well typically for you all.

Cameron (14:09):

Yeah, and we'll talk about that briefly about why this decision is so important. We have talked about it in a lot of our episodes. So when you look at the question, are Medicare Advantage plans bad? Of course not, but they're not for everybody. You should always compare both Medigap and Medicare Advantage plans when trying to find out which option is right for you. Joanne already mentioned it. If you're trying to just go with an advantage plan when you're healthy and change later, it doesn't usually work that way. So, when you are first eligible for part B of Medicare at age 65 or older, you have access to Medigap Open Enrollment. You can look at choosing a Medigap policy that is created by CMS. You can Google that, but they define this as the best time to consider both Medicare Advantage and it's the best time to buy a Medigap plan.

Cameron (14:54):

Since you can choose either option without health questions, you're guaranteed to get any plan that is offered in your area as far as Medicare Supplements go. Now after that, you will likely have to qualify for a Medigap plan based on your health at the time. So don't just choose a Medicare Advantage plan while you're healthy with the expectation that you can easily go to Medigap in the future, whatever route you choose, think about it long term. So what is right for you over the next 10 to 20 years versus just looking at your first year on Medicare, whenever that might be? Overall, keep in mind that Medicare Advantage plans, look and feel pretty similar to the health insurance you had on your own or through an employer before age 65. So they're not as scary and intimidating as people make them seem. They're probably actually going to feel pretty comfortable with an advantage plan based on what you're used to.

Cameron (15:41):

Lastly, if you do want to enroll in Medicare Advantage, just take the time to find the right plan for you. Work with somebody who's independent that can help you compare Medicare Advantage options available in your county. Don't just look at extra benefits being advertised, but check to make sure that the provider network matches your doctors and check to make sure that copays and the cost match what you are looking for, and consider all aspects of the plan. So, at the end of the day, the only bad Medicare coverage or Medicare advantage plan is one that you did not choose based on your individual health and circumstances. Medicare Advantage plans work for tens of millions of Medicare beneficiaries. Just think about the pros and cons before you enroll. As always, please leave us a review on your podcast app and subscribe so you can listen to future episodes. You can also find more Medicare content from us by going to YouTube and searching Giardini Medicare. If you have any questions or feedback, you can always send us an email at info@gmedicareteam.com. Thank you and have a good day.