Medicare Advantage, also referred to as Medicare Part C, is privately-offered insurance that serves as an alternative to Original Medicare (Medicare Parts A and B). Unlike Original Medicare, which is a federal program that provides the same coverage to all beneficiaries, Medicare Advantage plans are offered through private insurance companies and can have varying coverage levels and costs. Medicare Advantage plans can also provide extra coverage that is unavailable with Original Medicare, such as hearing, vision, and prescription drug coverage.
The popularity of Medicare Advantage varies between different states. Nationwide, 34% of all Medicare beneficiaries are enrolled in a Medicare Advantage plan, according to the Kaiser Family Foundation. California has one of the highest rates of enrollment in Medicare Advantage at 40%. Only five states in the nation have higher enrollment rates, including neighboring Oregon at 42%. California has a higher rate of Medicare Advantage enrollment than neighbors Arizona and Nevada, which have enrollment rates of 38% and 35%, respectively.
Seniors interested in Medicare Advantage in California have numerous plans and insurance providers to choose from. HMO, PPO, and SNP plans are all available, as are MA-PDs, which include prescription drug coverage. In this guide, we explain the three plan types, prescription drug coverage for Medicare Advantage enrollees in California, and when one can enroll in Medicare Advantage. We’ve also included Medicare resources for Californians who feel they need more assistance determining which Medicare plan type is the right fit for them.
Within Medicare Advantage, there are several different types of plans one can choose from. In California, seniors may enroll in one of three plan types: Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Special Needs Plans (SNPs).
Health Maintenance Organizations (HMOs)
Health Maintenance Organizations, or HMOs, offer premiums that tend to be lower than other Medicare Advantage plans, but plan participants are more limited in their care options. HMO plan members are required to receive care from doctors and other providers within a specified network in order to have any portion of their care covered. If one gets care from an out-of-network provider, they may be responsible for the entire cost of care. Additionally, HMOs typically require that a patient gets a referral from their primary care physician in order to see specialists.
Preferred Provider Organizations (PPOs)
Preferred Provider Organizations, or PPOs, also require members to use providers within a specified network in order to get the best coverage rates. Unlike HMOs, which may entirely deny coverage if a provider is out of network, PPOs still offer some coverage for out-of-network care. Still, to pay the lowest rates in copays and coinsurance, members must stay within their PPO’s network. PPO members can typically see specialists without a referral as well, making PPOs more flexible than HMOs. However, PPOs also tend to have higher premiums.
Special Needs Plans (SNPs)
Special Needs Plans, or SNPs, are designed to serve specific populations, such as people with disabilities or people with a certain type of chronic illness. SNPs provide coordinated health care services between the insurance provider and medical providers to best serve the population of the SNP. Unlike HMOs and PPOs, SNPs are required to provide prescription drug coverage. SNPs are not available to all Medicare participants; one must have the condition or be in the situation (such as living in a nursing home or have dual-eligibility for Medicare and Medicaid) that the SNP is intended for.
Prior to enrolling in Medicare Advantage, seniors must first be enrolled in Original Medicare. Anyone who is eligible for Medicare Parts A and B is also eligible to enroll in Medicare Advantage. However, certain Medicare Advantage plans, such as SNPs, may have additional eligibility requirements.
Medicare Advantage has specific enrollment periods. One can only join a Medicare Advantage plan during the following periods:
Additionally, Medicare Advantage plan participants can change their plan outside of these enrollment periods under certain qualifying circumstances, such as moving to a new state.
In California, seniors enrolled in Medicare Advantage who want prescription drug coverage must choose a plan that includes drug coverage, referred to as MA-PDs. There is no option to be enrolled in both Medicare Advantage and Medicare Part D in California, and if a Medicare Advantage participant does enroll in Medicare Part D, they will automatically be disenrolled from Medicare Advantage. In some cases, prescription drug coverage will be included in the standard plan premium, but some MA-PD enrollees will need to pay two separate monthly premiums.
Medicare is an invaluable resource for seniors, but getting enrolled and understanding one’s coverage can be difficult. With so many different elements of the program, some seniors may be left wondering what type of Medicare plan is best for them and their needs. Below, we’ve listed some state and local resources in California that can help seniors navigate the Medicare system and make the most of their coverage.
California’s Health Insurance Counseling and Advocacy Program (HICAP) is a Medicare and long-term care counseling service for seniors. HICAP can help California residents understand how to enroll in Medicare and the various aspects of the program, determine which Medicare plan type is best for them, and have any related questions about Medicare and long-term care answered. One-on-one counseling is available free of charge for eligible California residents. To be eligible, one must be at least 65 years of age and eligible for Medicare, or be younger than 65 but will be eligible for Medicare in the near future or have a disability. HICAP also holds educational events, which are open to people of all ages.
California Health Advocates is a non-profit focused on Medicare advocacy and education. The group provides accurate and timely information for Medicare beneficiaries and their families to help them better understand the program and make the most of their health care coverage. Subscribers can access the group’s comprehensive fact sheets that cover a range of Medicare-related topics specific to California, including Medicare Advantage. California Health Advocates also publishes a regularly-updated, Medicare-focused blog on its website with hundreds of helpful articles.
The California Department of Managed Health Care (DMHC) helps protect consumer rights and assists members of managed care plans (such as HMOs) with any problems to ensure all patients “receive the medical care and services to which they are entitled.” It also conducts plan compliance checks and issues public reports of its findings. On its website, the DMHC has information on California Medicare, choosing the right type of health care plan, enrollees’ health care rights, and more.
California’s Office of the Patient Advocate evaluates California health care plans based on patient experience and quality of care and gives each plan a rating based on this data. The ratings are published on the group’s website so consumers can research health care plans prior to enrolling. The group also rates hospitals and health groups and provides educational information such as the differences between different Medicare plan types. It also publishes annual reports of health care complaints made by California consumers.
California’s Aging and Disability Resource Connection provides several support services, including “options counseling.” This counseling service can help connect Californians to public and private support services, including health care programs like Medicare. The services are available to anyone regardless of age, income, or ability.
The MSSP provides services to seniors in order to help them remain in their own homes and communities. One of the many available services is a complete health assessment to help seniors determine their needs. The MSSP team then works with the individual to develop a care plan. This assessment and support can be beneficial to seniors considering Medicare Advantage but who are unsure if it is the right decision for their health and financial situation. MSSP services are available to low-income California residents who qualify for Medi-Cal and are 65 years of age or older.