As if the natural aging process didn’t present its own complications and uncertainties, those of you approaching 65, or who have already celebrated that milestone, may find yourselves struggling to make sense of various Medicare options.
Choosing between Medicare Part B and a Medicare Advantage (Part C) plan can be challenging, especially with the overwhelming advertisements promoting Medicare Advantage plans. Consider this: During 2022’s open enrollment period, more than 85% or 9,500 ads per day featured Medicare Advantage.
Spoiler alert! While these plans promise enticing perks, it’s essential to look closely at what they offer—and what they might leave out. In fact, this glut of misleading ad campaigns, often starring celebrities like William Shatner and Joe Namath, resulted in a federal crackdown, with insurance representatives like Mark Hamelburg of America’s Health Insurance Plans stating that, “Enrollees should be protected from bad actors who engage in misleading advertising and marketing tactics.”
While we can’t control the media, our team at Eastern MedTech is on a mission to protect and promote our customers’ overall health and well-being. To that end, we’ve crafted the following straightforward comparison to help you make an informed choice.
Knowledge truly is power and so, in that spirit, we’re presenting what you need to know about Medicare Part C replacement plans.
But first, let’s review Medicare Part B…
Understanding Medicare Part B
Medicare Part B is a federal program available to Americans over 65. For a little history lesson, Medicare was signed into law on July 30, 1965 by President Lyndon Johnson – an initiative begun by President Harry Truman, who had this to say on the day of the signing: “Mr. President, I am glad to have lived this long and to witness today the signing of the Medicare bill which puts this Nation right where it needs to be, to be right.”
Funded by payroll deductions and premiums, it covers essential medical services, like doctor visits, outpatient care, and certain home medical products (like CPAP and diabetic supplies). This program typically follows a simple structure:
- Deductible: Medicare recipients pay a yearly deductible (currently around $240).
- 80/20 Cost Sharing: Medicare Part B pays 80% of the approved fee schedule for services, leaving beneficiaries responsible for the remaining 20%.
- Supplemental Coverage Options: Many Medicare recipients purchase additional “Medigap” insurance (from providers like AARP, BCBS, or others) to cover the 20% coinsurance and potentially the deductible.
Medicare Part B offers stable coverage and is directly tied to federal funding, making it straightforward and accessible. However, there are alternatives, namely Medicare Advantage plans, which differ significantly in structure and service delivery.
What is Medicare Part C (Medicare Advantage)?
In 1997, Medicare Advantage plans (Part C) were introduced, allowing private insurance companies to manage Medicare benefits. Marketed as a more convenient “all-in-one” option, these plans replace Medicare Part B benefits with a private insurer’s coverage. Medicare Advantage plans are promoted as an “advantage,” often boasting extra perks like gym memberships or vision and dental coverage. However, it’s crucial to weigh these against potential drawbacks.
Here’s a breakdown of what Medicare Advantage plans offer and where they fall short:
Potential Advantages of Medicare Part C
- Extra Perks: Medicare Advantage plans often provide additional benefits not covered under traditional Medicare, such as dental, vision, and wellness programs (e.g., discounted gym memberships).
- Lower Premiums: In many cases, Medicare Advantage premiums are lower than those for Medicare Part B and supplemental insurance combined.
- Simplified Billing: Instead of juggling Part B with a Medigap plan, members receive all services under one plan, simplifying costs and paperwork.
The Disadvantages (and Potential Risks) of Medicare Advantage Plans
Despite their promises, Medicare Advantage plans have significant limitations, especially if you rely on specific supplies or therapies, like CPAP or diabetic supplies. Our team is concerned about the following, in particular:
- Restricted Access to Services: Medicare Advantage plans have the flexibility to set lower reimbursement rates than standard Medicare, limiting the range of suppliers and providers who accept these plans. This can create challenges for seniors who need products like continuous glucose monitors (CGM) or CPAP supplies.
- Higher Out-of-Pocket Costs: Although monthly premiums may be lower, many Medicare Advantage plans require prior approvals, copayments, or additional costs for services not covered in full—unlike the 80/20 structure in traditional Medicare.
- Network Limitations: Unlike Medicare Part B, Medicare Advantage plans often restrict access to specific networks of doctors and providers, making it difficult to access certain services, especially in emergencies or specialized care needs.
- Increased Administrative Hurdles: Medicare Advantage plans frequently require prior authorization for various treatments, therapies, and supplies, creating delays and frustration for seniors in need of timely care.
How Medicare Advantage Plans Affect Access to Essential Supplies
For those requiring consistent supplies, like CPAP machines or diabetic supplies, Medicare Advantage plans can create real obstacles. Many suppliers, including ours, find that reimbursement rates under Medicare Advantage plans are below our costs, making it unsustainable to offer these items. This can mean delays or outright lack of access to necessary medical supplies and equipment, forcing seniors to seek lesser alternatives.
In contrast, under Medicare Part B with supplemental insurance, coverage is straightforward, predictable, and widely accepted across providers. This accessibility can be vital for seniors who rely on regular medical equipment.
What’s the Best Option?
If you rely on specific home medical equipment or supplies, sticking with Medicare Part B and purchasing supplemental insurance may provide the best access and least hassle. Medicare Part B’s federal backing, wide acceptance, and consistent cost-sharing model make it a more reliable option, especially for seniors who depend on consistent or specialized care.
Key Takeaways
- Medicare Part B: Pays 80% of medical expenses; straightforward and widely accepted.
- Supplemental Insurance: Can cover the remaining 20% for Part B recipients, reducing out-of-pocket costs.
- Medicare Advantage (Part C): Offers added perks but comes with limitations on providers, reimbursement rates, and service access, which translate to limitations on what plan recipients may receive.
- Recommendation: If you need continuous access to supplies like CPAP or diabetic supplies, Medicare Part B with supplemental insurance generally offers greater reliability and access.
Let’s Get Hypothetical!
If you’re like us, complex information is best put in context by way of a hypothetical example or two.
For a CPAP user, suppose they need fresh supplies every 90 days. Under a standard medical insurance plan with traditional coverage, they might only need a doctor’s written order to get these supplies every 90 days, with a 20% co-pay and a yearly deductible. However, with supplemental coverage, that 20% could be covered, reducing their out-of-pocket expenses. This kind of plan also typically allows users to choose their own providers freely, ensuring flexibility in where they get their supplies.
Now, let’s consider a different plan—a hypothetical “Zero Premium Health Plan.” This alternative might offer appealing perks, like zero monthly premiums, no drug co-pays, and even incentives like health club rewards. While these perks can be attractive, there may be trade-offs. This type of plan might limit provider choices and require prior approvals for certain services, which could delay access to necessary supplies or care. Providers under this plan might be more limited, often directed to those within a specific network. Furthermore, to reduce administrative costs, customer service and claims processing might be outsourced, which can sometimes lead to challenges with communication or longer wait times for assistance.
For a diabetic using a CGM, they may also find restrictions on where and how they can obtain their supplies. Under a traditional plan, they might have the freedom to choose any supplier, making it easy to obtain supplies on schedule. However, under a hypothetical managed-care plan, they could encounter more “hurdles”—for instance, they might need to go through a designated provider for supplies or get prior authorization each time, potentially adding delays.
This is why it’s so important to not only understand the immediate costs and benefits of each type of plan but also the potential limitations on access to necessary services and supplies. For those managing chronic conditions, choosing a plan that aligns with both your financial and healthcare needs is crucial!
Consider Your Healthcare Needs Before Choosing
With Medicare’s open enrollment season running until December 7, now is the time to review your options. If you need consistent access to specific supplies and services, consider whether a Medicare Advantage plan will truly meet your needs—or if traditional Medicare Part B with supplemental insurance is a better fit.More than our products and services, at Eastern MedTech we’re passionate about providing you with information that empowers your health and wellness. We invite you to contact us with your questions and concerns, anytime.