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Choosing a Medicare Plan

Monday, July 24, 2017

It is good to have choices; but sometimes it is difficult to determine which choice is actually best for you.  This is true with respect to Medicare.  You have two choices:  Traditional Medicare A and Medicare Advantage Plans. 

Traditional Medicare Part A is governed by a set of rules established by the Federal Government that provide some clear benefits and a couple drawbacks.  The benefits are many.  Recipients may use any certified Medicare provider. Medicare Part A will pay for skilled level of care services in a hospital and in a nursing home for up to 100 days if it is determined to be necessary by the physician and the care plan team.  All medical and rehabilitative costs are covered by Medicare Part A in the nursing home for the first 20 days and then a co-pay is required which is usually paid by your Medicare co-insurance plan.  The downside is that Medicare Part A and coinsurance is usually more expensive than the alternative – Medicare Advantage Plans. 

Medicare Advantage Plans (managed care plans) can offer different benefits and perks and they are often less expensive. They do have a limited number of providers from whom you choose to receive various services. Insurers are paid a sum of money by the Federal Government to manage the care of everyone who signs up for their plans; but therein lies the problem with advantage plans.  The lower prices and extra perks are hard to turn down; but when you actually need higher cost care, the advantage plan is more restrictive.  Medicare Advantage Plans often cut off benefits as much as 50% sooner because the insurer cuts the service earlier.  In contrast, with Medicare Part A, your doctor and care plan team determines when your services will be cut.  In addition, Advantage Plans pay providers (such as Homestead Village) much smaller amounts of money unless a contract exists between the provider and the insurer.  Currently Homestead Village has Medicare Advantage Plan contracts with Highmark Blue Shield (Freedom Blue) Capital Blue Cross (Blue Journey, Security Blue and Secure Choice),Aetna (Commercial and Medicare Advantage), and Health America/Coventry/Advantra.  Any other advantage plan may or may not be accepted depending on the willingness of the insurer to pay a reasonable rate.

If you choose an Advantage Plan, it is important to remember that the money saved up front will need to be used to purchase the days or weeks of service when you really need it, since the advantage plan insurer will very likely stop your Medicare benefits sooner.  A nursing home semi-private room averages over $300 per day and therapy, drug and other charges are over and above that amount.  People are often surprised and even angry when their Medicare Advantage benefits are cut; but this is a reality.  The additional cost could total thousands or even tens of thousands of dollars. The other reality is that many nursing homes will not accept certain Medicare Advantage Plans so it is important to know which plans are accepted.  Each individual needs to determine which type of Medicare is really best for them.  It is hard to know the best option for sure.  Much like a trip to Las Vegas the real question is, “Are you feeling lucky?”  A good rule of thumb is to choose an advantage plan if you are healthy and younger; but consider a traditional Medicare Part A plan and coinsurance when you are older, more frail or sick.