In the United States, you are eligible to enroll in a Medicare Advantage plan if you are either 65 years of age or older, are under 65 with certain disabilities. Medicare Advantage is an alternative to Original Medicare Part A and Part B, the federal program established in 1965 to provide healthcare coverage for individuals who qualify. Medicare Advantage plans, also known as Medicare Part C, became an option for Medicare beneficiaries to purchase from private healthcare insurance companies in 1997.
Medicare Advantage plans must provide the same coverage as Parts A and B, but many offer additional benefits, such as vision and dental care, hearing exams, wellness programs, and Part D, prescription drug coverage. What coverage you have through your Medicare Advantage policy depends on where you live, the insurance company you enroll with, and what plan you choose.
Having a Medicare Part C plan is not a requirement for Medicare coverage, it is strictly an option many beneficiaries choose. If you decide to enroll in a Medicare Advantage plan, you are still enrolled in Medicare and have the same rights and protection that all Medicare beneficiaries have.
Understanding Medicare Advantage Reimbursement
The amount the insurance company receives from the government for you as a beneficiary is dependent upon your individual circumstances. As a beneficiary of a Medicare Advantage plan, if your monthly health care costs are less than what your insurance carrier receives as your capitation amount, the insurance company makes a profit. On the other hand, if your monthly healthcare costs are higher, the insurance company is responsible for covering that difference.
The money that the government pays to Medicare Advantage providers for capitation comes from two U.S. Treasury funds. The first one is The Hospital Insurance Trust fund, which pays for whatever is covered in Part A of Original Medicare, such as hospital, skilled nursing care, and hospice coverage. The second fund is the Supplementary Medical Insurance Trust which pays for what is covered in Part B, Part D, and more.
As a beneficiary enrolled in a Medicare Advantage plan, you will also be responsible for some of the costs of your healthcare. You will likely pay your Part B monthly premium of $135.50 (in 2019), and you may also pay an additional monthly premium for your policy. The amount depends on your location, the company providing the plan, and the plan you choose.
Your Medicare Part C plan may also include other expenses due to cost sharing. Depending on your policy, you may have one or more yearly deductibles, and you may also have to pay coinsurance or copayments.
If you are getting close to 65 and are wondering if a Medicare Advantage plan is a good option for your healthcare needs, be sure to learn all the details about the plans that are available in your area so you can choose your best option.
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