All Seniors Should Consider Medicare Advantage Option

Dear Savvy Senior,

I will be eligible for Medicare next year and I have been hearing a lot about Medicare's private plans called Medicare Advantage. What can you tell me about this option? Seeking an Advantage

Dear Seeking:

Medicare Advantage (MA) is an option all Medicare beneficiaries should consider. Depending on your coverage needs and where you live, it may be your best option.

Medicare Advantage

MA plans (formerly known as Medicare+Choice) are health plans sold by private companies that are an alternative to the traditional Medicare Part A and B, but are still part of the Medicare program. Over the past few years, MA plans have improved dramatically, due to increased government-subsidies, offering beneficiaries better benefits with fewer restrictions at much lower prices. Here are some key points on how they work:

+ Eligibility: All Medicare beneficiaries are eligible for MA, unless they have end-stage renal disease. In order to join, you have to have Medicare Part A and Part B and must pay the monthly Part B premiums ($93.50 in 2007).

+ Coverage: MA plans provide at least the same coverage as the original Medicare Part A and B, and many plans offer additional services, such as vision, dental, hearing, prescription drugs and more.

+ Costs: After paying the monthly Part B premium, you may have to pay a small additional premium, depending on the plan and extra benefits you choose. There may also be some additional out-of-pocket costs for co-pays and deductibles for hospital stays, doctor's visits and other benefits. (Note: MA plans on average are cheaper than what you would pay for traditional Medicare and a Medigap supplemental policy and a standalone Medicare prescription drug plan.)

+ Shopping: MA plans are available almost everywhere. However, the plans and services will vary, depending on where you live. To search for and compare plans, visit www.medicare.gov/mppf.

+ Enrollment: If you currently have traditional Medicare A and B, you can sign up for a MA plan during the open enrollment period from November 15 to December 31. Those new to Medicare can sign up any time.

+ Providers: Most of the top companies that offer MA plans have significantly expanded their services. United Healthcare's SecureHorizons, for example, also offers a new educational Web site for seniors and free MA materials at www.ilivesecure.com. Other top providers include Humana, Kaiser, Keystone and Aetna.

Better Options

A concern many people have had with Medicare's private plans over the years is the managed care (HMO) factor, which limits the doctors and hospitals you can use. But today's MA plans offer some new options that provide a lot more flexibility. The options include:

+ HMO (managed care plan): This is the least expensive, but also the most restrictive type of plan. With an HMO you must get your health care from a group of doctors and hospitals within the plan's network, except in an emergency.

+ PPO (Preferred Provider Organization): This improved option gives you access to a network of doctors and hospitals, just like an HMO, but it also allows you to seek care outside the network. Care outside the network usually costs extra, though.

+ PFFS (Private Fee For Service): This is a popular type of plan that gives you the flexibility of using any doctor or hospital in any part of the country that accepts Medicare. These plans usually cost more than HMO or PPO plans.

+ Special Needs Plans: These plans offer health coverage to people eligible for both Medicare and Medicaid, those in nursing homes and those with chronic conditions.

Things to Know

If you're interested in MA, here are some important things to be clear on before signing up:

+ Health care access: If you choose an HMO or PPO, can you continue to see the doctors you know and trust if you join a certain plan? If not, how much will you have to pay if you want to see them? What about your choice of hospital?

+ Coverage details: The extra benefits offered by MA plans vary widely and can change every year. If you join an MA plan for its prescription drug coverage, check the plans formulary list to make sure it covers the drugs you need.

+ Cost breakdown: How much are the monthly premiums and co-payments for the different services? Are there deductibles? Compare services and costs with other MA plans, as well as with traditional Medicare and Medigap policies, including Medicare's Part D prescription drug plans, if you'll need one.

Savvy Tips: To learn more, see your "Medicare & You 2007" handbook or visit www.medicare.gov. To get help, contact your State Health Insurance Assistance Program (SHIP), which offers free Medicare counseling. Call 800-633-4227 or visit www.shiptalk.org to find your local SHIP.

Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit www.savvysenior.org. Jim Miller is a contributor to the "NBC Today Show" and author of The Savvy Senior books.