For the first time in Medicare’s history, CMS reports that Medicare Advantage (MA) plans now account for just over half of eligible beneficiaries. This enrollment trend highlights a significant increase in recent years. In comparison, fewer than 20% of Medicare beneficiaries chose to enroll in an MA plan in 2007, according to the Kaiser Family Foundation. There are several factors leading Medicare beneficiaries to choose MA plans over Original Medicare.
A key factor in the popularity of MA plans is the additional benefits. These perks are attractive to seniors looking to get the most value for their budget. Almost one in four Medicare beneficiaries cited these extended benefits as their reason for choosing an MA plan.
Supplemental benefits can include:
- Transportation to medical appointments
- Home-delivered meals after a hospital stay
- Massage therapy
- Gym memberships
- Health and wellness programs
- Over-the-counter allowance to purchase everyday OTC medications and supplies
Some plans offer gift cards for OTC medications when members complete annual preventive services like routine physicals, colonoscopies and mammograms.
Five-star plans in particular offer many of these benefits. This is because CMS rewards such plans with annual bonus payments that help cover the cost of benefits.
MA plans are affordable, with many carriers offering $0 and low-cost premium plans. Some even offer Part B giveback plans that reduce a beneficiary’s Part B premium. In comparison to enrolling in Original Medicare coupled with paying for a Medigap plan premium and a separate Part D premium, MA plans are very budget friendly. Many MA enrollees also like knowing they have an annual out-of-pocket maximum that will cap how much they can spend in a year.
Many seniors like the simplicity of enrolling in an MA plan. Original Medicare Parts A and B may seem intimidating, as each has its own deductibles and coinsurances. Plus, the number of Medigap plans and their varying coverage and costs can be confusing. With MA plans, drug coverage is included, there’s no need for a supplemental policy, and seniors pay just one monthly premium.
Disadvantages of a Medicare Advantage Plan
There can be some disadvantages to enrolling in a Medicare Advantage plan.
- Network – MA plans require seniors to use in-network doctors and hospitals. HMO plans offer no non-emergency coverage for out-of-network providers. With a PPO plan, seniors can receive care from out-of-network providers but at higher out-of-pocket costs. People who choose to enroll in Original Medicare cite having a greater choice of providers as their primary reason for not enrolling in an MA plan.
- Prior authorizations and referrals – MA plans require prior authorizations for certain procedures. Plans may also require referrals to see specialists. Some beneficiaries prefer not to deal with additional obstacles that could delay or limit their access to care.
- Coverage when traveling – MA plans have more coverage limitations when traveling, especially for international travel.
What Is the Right Choice for Your Clients?
Help your clients consider all the aspects of a Medicare Advantage plan to determine if it’s the right choice for their healthcare needs, budget, and lifestyle. They should consider:
- Costs – Look at the monthly premium, deductibles, copays, coinsurance, and out-of-pocket maximum.
- The network – Are their preferred doctors and hospitals in the network? Do they want the option to see out-of-network providers?
- Prescriptions – Are their drugs covered on the formulary? What tier are they on? Is their preferred pharmacy in the network?
- Chronic health conditions – What is the coverage for any tests and procedures associated with their condition? Are prior authorizations required? Will they need referrals to see specialists?
- Lifestyle – Do they travel frequently, either domestically or internationally, and does an MA plan provide appropriate coverage?
Let your clients know you are their best resource for finding the right Medicare coverage. You can help them understand all their options and make the right decision.
Western Asset Protection is your best resource for growing your business and achieving your career goals. In an effort to build Health, Wealth, and Life independent insurance professionals and agencies, we offer support and training with Medicare Advantage, Medicare Supplement, and additional product offerings. Contact us today.