Welcome to Medicare School Daily, where we help you understand Medicare, save money,
avoid mistakes, and above all, get the most out of your Medicare benefits. As most of
you know by now,
there are two systems available to you in Medicare.
When you go on Medicare, you have to choose one of these two systems.
One system is called original Medicare, A and B, and typically people get a supplemental
plan to fill in the gaps that Medicare didn't cover.
So that's one option.
The other option is to go with what is called an advantage plan, or replacement plans.
And again, it's just a different system.
So you have to choose one or the other.
50 percent of all people will take a Medicare supplemental plan and 50 percent will use an
advantage plan.
And so today, what I want to do is address advantage plans. For those of you that will opt for the advantage
plan, I want you to realize that there are actually four major differences between the advantage
plans,
and you're going to have to select a plan that's best for you based upon these differences.
Number one, there will be a difference in networks. Within the advantage system
there will be either an HMO plan or a PPO plan that will be available with you.
Now, the difference between those are HMO we describe here with a smaller box because
there will be typically less choices, less doctors, less specialists, less hospitals
to choose from.
PPO, we describe with a much larger box because there will be more docs, more hospitals that
will be available to you.
So that's a difference in the size of the network.
The other difference that is major is out of network.
If you're on an HMO plan, you cannot go out of the network unless it's emergency or urgent
care.
But otherwise, you must stay in your network.
You also sometimes have to have a referral to see a specialist on an HMO plan. On a PPO
plan you don't have to ever worry about referrals.
You can go to any doctor within the network, any hospital in the network.
You'll also have the option to go out of network.
So if someone is a provider that you would like to see, that's not in your PPO network, you
can go out.
It'll cost a bit more money, but you still have the option to do that.
So those are some of the network differences.
Now, the second difference would be your out-of-pocket expenses.
Now, you probably know that when you are an advantage plan, instead of paying a lot of premiums,
what you do is you pay a copay for everything that you do.
You see a specialist, you'll pay a copay. Have a test, an MRI, or a CAT scan
you have a copay. Outpatient surgery, copay. Hospital copay.
So you pay co-pays for pretty much all the services that you get on the advantage plan.
But those co-pays do come to a max. A max out of pocket for the year, and then that max
out of pocket resets every January.
So as we pay our co-pays, they're accumulating, and our max out of pocket
are going to range anywhere from about $3,000 to $6,000.
Most of the HMO plans are going to be in that kind of lower range;
the PPO plans are going to be a little bit of a higher range.
All right?
So that's the max out of pocket through your accumulation of copayments throughout the
year.
And again, max out of pocket's reset every January.
And now when it comes out of network benefit, remember HMO's, we can't go out of network,
but the PPO's allow us to do that.
Now, when we go out of network, we typically pay a little bit more money.
We're going to spend anywhere from about $7,000 to $10,000.
But if you decide that you would like to go somewhere for maybe cancer care, whatever,
you actually have the option to do that;
it's just going to cost you a bit more money. Once you've hit your annual max out of pocket,
then you will be done.
Now, this is not an additional 7 or 10.
This would be an accumulation of all your co-pays when you'd hit your max when you go
out of the network.
Now, the third difference will be prescription drug plans.
Most advantage plans in the market today will have what we call an embedded drug plan.
It's included within the package.
Now, the big difference between drug plans is really one primary item, and that is called
a formulary.
A formulary is nothing more than a list of the medications that are covered by the plan.
And it's actually the most important thing that we look at when we look at prescription
drug plans.
What's the formulary?
Can I get my medications covered?
Now, some formularies embedded within advantage
plans are good.
Some are better.
Some are even best.
And so that's the difference.
The size of the formulary.
And so when we look at advantage plans, we certainly want to make sure your doctor and
your hospital is in the network.
But we also want to make sure that you have good prescription drug coverage.
And so that varies plan to plan.
Honestly, some are very good and some are mediocre.
But if you need a very good drug plan, you want to make sure that you're on an advantage
plan that is going to cover your meds well and give you the very best cost.
OK?
So that's the third difference.
And then the last difference would be premiums.
Now, advantage plans typically are very low cost on a monthly basis as far as premiums
go.
Why?
Because you pay co-pays instead of premium.
And so there are many plans in markets throughout the country.
We have a zero premium and on the high side, maybe forty-nine dollars.
And so the question is, well, why would I pay a premium?
Forty-nine dollars.
When I can get a plan, for zero.
Here's a reason why some have to do that, because whenever you pay a premium for a plan,
just because they have enriched the benefits to that plan, which means you may have a larger
network and you're going to have to pay extra money for that, you may have a max out of
pocket that's lower.
So I may have a zero premium plan where my max out of pocket is 5,000 dollars,
but if I pay some
kind of a premium, that max out of pocket may come down to $3,000 or maybe
3,500 dollars.
And if you have a lot of health problems knowing you may meet that max, it may be in your
best interest to pay a premium for that.
And really, here's the big difference is when you have a plan that charges a premium,
that formulary is probably going to be very good.
Meaning they have a formulary
that's very broad,
Lots and lots of meds that are covered at a very low cost.
And so sometimes it is better to pay a premium so you can reduce your out-of-pocket expenses
for your medications.
All right?
And so those are the main differences between the advantage plans and for those of you that
opt for an advantage plan.
These are things you need to consider as you make that very important decision.
Thanks so much for watching.