Below is the transcription of Explaining Medicare Advantage Plans. To watch the full video please click here.
Jocelyn:
“What is the difference between advantage and supplements?”
Tim:
“This is probably our most asked question we get daily here, and there are a lot of differences. Think of advantage plans as an alternative way to get your Medicare coverage. This is a plan that is administered by a private insurance company and it’s putting together a bundle for you. It’s got medical, it’s got hospital, it’s got prescriptions, and typically has a few supplementary benefits that go along with it. Because the plan is putting it together, they get to call the shots. They’re gonna set the co-pays, they’re gonna set the deductible, they’re going to create the network. These are network based plans, which is probably one of the most frustrating aspects of the advantage plan. You have to stay within their network. If you want to go outside, you might have to pay.”
Jocelyn:
“This is like private insurance and HMOs and trying to figure out what you’re going to do there which can also be very confusing. Here you think you are getting Medicare but the Advantage Plan is private.”
Tim:
“It’s private. Yeah, you’re actually off of Original Medicare. You don’t use your red, white and blue Medicare card. You’re using your Advantage plan card. People say why are they are a popular option?:
Jocelyn:
“Yeah, why would someone want that?”
Tim:
“They’re cheap. The premium is very very low. So what you are doing with an Advantage plan, I always tell clients, you’re rolling the dice.”
Jocelyn:
“You are playing Russian Roulette with your health.”
Tim:
“You don’t know what you’re going to spend on an Advantage Plan. You simply don’t. A lot of these plans you can spend up to sixty-seven hundred dollars a year. That’s far far above what you would spend on a supplement.”
Jocelyn:
“Who would look at this Advantage plan? I mean typically? Because it’s cheap. But perhaps someone who’s really healthy I would assume?”
Tim:
“It can be the right plan for maybe the right person. Typically, it’s budgetary in nature. Someone that cannot afford the Medicare supplement premium. They are going to say okay well this is my only option, the Advantage Plan. Then they just have to work within that.
Typically the school of thought is if you can afford a supplement, a supplement is going to be better coverage for you. You sleep better at night. You know you’ve got a plan that’s going to take care of you if something happened. When you’re on that Advantage plan, you just never know. What’s my bill going to be? What happens if I go into the hospital? How much am I going to have to spend? They really have to think about do they have cash that they can pull out to pay for certain health events.
I don’t want to say advantage is not the right plan for everybody. It can be the right fit. But typically, a supplement is just going to be a more comprehensive plan. What these Advantage plans will do, is they’ll add in like two free dental cleanings a year. They might give you a gym membership. So these plans look very appealing on the outside. They don’t cost me anything. I get these little benefits. I can go to the gym. But when you really need the coverage to take care of your health, this is where I kind of feel they fall short. “
Jocelyn:
“If you do have an Advantage Plan can you switch to something?”
Tim:
“Great question. Advantage plans are a little bit like contracts. You are locked into it for the full year. Every fall during AEP season this is when you can attempt to do that. Now typically, if you are on an Advantage Plan and you want to come up to a supplement, you do have to clear the Supplemental company’s underwriting standards. So if you are not in good health, you might have to stay on the Advantage plan. This is why when you turn sixty-five and you come onto Medicare, you’re at a fork in the road, right? I can go supplement. I can go advantage. If you go advantage first and want to come back to supplement two years down the road, if your health is not great, it can be a challenge. So it’s a really important decision to think about when I’m turning sixty-five. Think about a plan that’s going to age well with you. You can’t think about just now. You have to think about the coverage that’s going to age well with you.”