Medicare Advantage plans are guaranteed renewable, but a particular plan’s benefits may change from year to year. This means coverage could be different, even if no changes are made during the open enrollment period and seniors continue paying their premiums.
The Difference Between Medicare Advantage and Medicare Part D
Medicare Advantage, also called Medicare Part C, refers to plans offered by private insurers who have entered into contracts with the government. Although these plans have their own premium costs, they offer more comprehensive care benefits, including some degree of drug coverage.
Medicare Part D is a prescription drug coverage plan that Medicare beneficiaries can add onto Original Medicare. Since it’s administered by the federal government, there are standardized options and coverage, making it a less flexible option compared to Medicare Advantage plans.
Understanding Insurance Policy Terms
For seniors reviewing insurance options, stability is a significant consideration. Health changes, such as developing a chronic illness, may result in more claims, which leads some insurers to terminate the buyer’s policy or make other undesirable changes. Renewable plans can help seniors avoid this problem. There are several types of renewable plans.
- Guaranteed renewable: This refers to a health plan or an add-on feature, known as a guaranteed renewable rider, that ensures policyholders can’t be dropped by the insurer as long as they consistently pay their premiums on time. For this reason, credit cards and automatic deductions from a checking account are recommended payment options. The insurer may still raise the plan’s premium if the change affects an entire class and doesn’t single out an individual policyholder.
- Noncancelable: Noncancelable policies prohibit the insurance company from canceling a plan, increasing premiums and reducing benefits, as long as the policyholder consistently pays premiums.
- Conditionally Renewable: Conditionally renewable plans allow insurers to drop policyholders under certain conditions.
- Optionally renewable: This means that the insurer can cancel the policy on the premium due date, also known as the policy anniversary.
All Medicare supplement plans are guaranteed renewable, including Medicare Advantage. However, even though the plan will be automatically renewed, important changes may take place periodically. Each fall seniors receive an Annual Notice of Change (ANOC) detailing any changes in their plan’s coverage, cost or service area slated to take effect in the new year.
