A Medicare Advantage Plan is another option for a federal retiree age 65 and older to supplement their Original Medicare (Medicare Part A and Medicare Part B) coverage. Medicare Advantage plans, or MA plans (formerly called Medicare Choice plans or Medicare Part C) are Medicare-approved plans. MA plans are offered by private insurance companies and must follow rules set by the Center for Medicare and Medicaid Services (CMS).
Federal retirees aged 65 and older and enrolled in Original Medicare are eligible to enroll in a MA plan. This column discusses the options federal retirees have to enroll in a MA plan, and why MA plans may be attractive to some federal retirees.
What is Medicare Advantage?
SEE ALSO:
Medicare Advantage is a bundled alternative to Original Medicare that typically includes:
• Medicare Part A and Medicare Part B. An enrollee is responsible for paying the Medicare Part B monthly premium.
• Medicare Part D – outpatient prescription drug coverage, and
• Additional benefits including dental, hearing and vision coverage.
In most MA plans, a Medicare Advantage enrollee needs to use medical, dental and vision care providers who participate in the plan’s network. A Medicare Advantage plan sets a limit on what a plan enrollee has to pay out of pocket each year for services covered under Medicare Part A and Medicare Part B. Some Medicare Advantage plans offer non-emergency out-of-network care, but typically at a higher cost. For certain services or prescription drugs, a plan enrollee may need to get approval (prior authorization) from the MA plan before the MA plan pays these services or prescription drugs. In some MA plans, a plan enrollee needs to obtain a referral in order to use a specialist outside of the plan network.
The Different Types of Medicare Advantage Plans
There are three main types of Medicare Advantage plans: (1) Health Maintenance Organization (HMO) MA plans; (2) HMO Point-of-Service (HMOPOS) MA plans, allowing an enrollee to get some services out-of-network for a higher copayment or coinsurance; and (3) Preferred Provider Organization (PPO) MA plans.
What Do Medicare Advantage Plans Cover?
Medicare Advantage plans provide all of an enrollee’s Medicare Part A and Medicare Part B benefits. These benefits include most new benefits that come from laws or Medicare policy decisions. Medicare Advantage plan benefits exclude hospice care and some costs of clinical trials. However, Original Medicare will help cover a beneficiary’s costs for hospice care and some costs for clinical research studies.
With some Medicare Advantage plans, an enrollee has coverage for expenses that Original Medicare does not cover, such as fitness programs (gym memberships or discounts) and some vision, hearing and dental services. Some plans cover other benefits such as transportation to doctor visits and over-the-counter drugs that Medicare Part D does not cover. It is important that individuals check with the MA plan before joining the plan to find out what benefits it offers, how much the benefits cost, and if there are any limitations.
What do Medicare Advantage Plan Enrollees Have to Pay?
Besides the monthly premium for Medicare Part B, what a Medicare Advantage Plan enrollee has to pay depends on:
• Whether the plan charges a monthly premium.
• Whether the plan pays some of the enrollee’s monthly Medicare Part B premiums. This is sometimes called a “Medicare Part B premium reduction” .
• Whether the plan has a yearly deductible or any additional deductibles for certain services.
• The amount an enrollee pays for each visit or service such as a copayment or coinsurance. Note that Medicare Advantage plans cannot charge more than Original Medicare for certain services such as chemotherapy, dialysis, and days 21 -100 of skilled nursing facility care.
• The type of health care services the enrollee needs and how often these services are used.
• Whether the enrollee gets services from a network provider or a provider that does not contract with the plan.
• Whether the enrollee goes to a doctor, hospital, clinic or a medical supplier who “accepts assignment” from Medicare.
• Whether the plan offers extra benefits in addition to Original Medicare benefits, and if the enrollee has to pay extra to get the benefits; and
• The Medicare Advantage plan’s limit on out-of-pocket costs for Original Medicare services.
Why Medicare Advantage Plans May Be Attractive to Some Federal Retirees and Enrollment Options
To learn more about costs in a specific Medicare Advantage plan, individuals should contact the plan or visit https://www.medicare.gov/plan-compare.
Federal Retiree Choices for Medicare Advantage Plan
There are two ways a federal retiree enrolled in Original Medicare can enroll in a Medicare Advantage plan. The first way is through the FEHB program. Some FEHB health insurance companies offer Medicare Advantage plans. Those retired federal employees enrolled in Original Medicare have the option of enrolling in a Medicare Advantage plan offered by one of the FEHB program insurance companies. Enrollment is done during the annual open season.
SEE ALSO: FEHB Offers Enhanced Medicare Advantage and Medicare Part D Plans for Federal Retirees
The other way a federal annuitant can enroll in a Medicare Advantage plan is by enrolling in a private Medicare Advantage plan, offered by private insurance companies and regulated by the Centers for Medicare and Medicaid Services. In order for a federal annuitant to enroll in a private Medicare Advantage plan, the annuitant would have to suspend his or her FEHB program enrollment. Note by suspending FEHB program enrollment, the annuitant during a future open season reenrolls in the FEHB program.
The following chart summarizes when an annuitant can make changes to a private Medicare Advantage plan.
Federal annuitants who are considering enrolling in any Medicare Advantage plan should be aware of the following:
• An annuitant must be enrolled in Original Medicare – Medicare Parts A and B – in order to enroll in any Medicare Advantage plan,
• An annuitant who has family members such as a spouse enrolled on the annuitant’s FEHB plan, the family member must also be enrolled in Original Medicare in order to enroll in any Medicare Advantage plan. If the annuitant has children under the age of 26 who are enrolled on the annuitant’s FEHB health plan, then the annuitant cannot enroll in a Medicare Advantage plan. This is because the children are not eligible to enroll in Medicare.
• Annuitants should be aware that Medicare Advantage plans, particularly Medicare Advantage HMO plans, may have limited networks of doctors and hospitals. This means that Medicare Advantage plan beneficiaries and their family members are limited to the doctors, hospitals, clinics and other medical providers they prefer or want. Beneficiaries may also have a challenging time getting coverage if they are traveling away from their home region.
• A Medicare Advantage beneficiary’s drug coverage can come through a stand-alone Medicare Part D (Prescription Drug program) plan. This may be necessary if an annuitant has excessive prescription drug expenses and is enrolled in Original Medicare and an FEHB program plan, or if enrolled in a Medicare Advantage plan. Medicare Part D is wrapped into the Medicare Advantage plan. The problem is each Medicare Part D plan (there will be 21 Part D plans for 2025) has its own formulary for which prescription drugs it will pay. A beneficiary’s prescription drug may not be covered in a particular drug plan. Annuitants go to https://www.medicarecoveragefinder.com/plans to see if their prescription drugs are included in a particular Medicare Part D plan that they are considering.