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Medicare Advantage (Medicare Part C)

Page Reviewed / Updated - Jan. 2019

Overview

To have a better understanding of Medicare Advantage (MA) plans, also referred to as Medicare Part C, it’s important to start with an overview of Medicare. A federal program, Medicare provides health insurance for seniors who are 65 years of age and older, as well as some persons who are under 65 years old, but are disabled. Original Medicare, also called traditional Medicare, is comprised of Medicare Part A (hospital coverage) and Medicare Part B (medical coverage).

An alternative way to receive Medicare benefits is through Medicare Advantage plans. Unlike Original Medicare, where benefits are available through the government plan, Medicare Advantage plans are made available through private insurance companies approved by Medicare. Through Medicare Part C, program recipients receive the same benefits as with Original Medicare (Medicare Part A and Medicare Part B). However, additional supplemental benefits, such as dental, vision, and hearing, are also often available. It’s also common for Medicare Part D (prescription drug coverage) to be included in MA plans. (Persons receiving Medicare through Original Medicare can purchase Medicare Part D separately from their Part A and Part B coverage).

In April of 2018, the Centers for Medicare and Medicaid Services announced that beginning in 2019, Medicare Advantage (MA) plans are able to cover supplemental health care benefits. This change is huge, as based on one’s MA plan, in-home care (non-medical), adult day care, home modifications, respite care, housekeeping, and non-medical transportation may be covered. In the past, none of these benefits have been offered.

Medicare is administered by CMS, and is funded by a variety of sources, including payroll taxes, Medicare premiums, and general revenues.

Benefits

As stated above, Medicare Advantage plans include Medicare Part A, also known as hospital insurance or inpatient coverage, and Medicare Part B, also called medical insurance or outpatient coverage. In addition, some MA plans include prescription drug coverage (Medicare Part D).

An announcement on 4/2/18 by the Centers for Medicare and Medicaid Services (CMS) bring big changes for Medicare Advantage recipients who require “daily maintenance” services. In the past, as mentioned above, MA plans have offered supplemental benefits, such as vision, dental, gym memberships, and hearing, but in 2019, MA plans will also be able to offer in-home supplemental health care benefits. What this means is that a variety of non-medical, in-home items and services may be covered by MA plans to encourage aging at home, and hence, delay nursing home placements.

There is room for interpretation as to what defines a “home”, as CMS does not provide a clear definition. At the time of this writing, it is thought that assisted living residences (as well as memory care, also referred to as Alzheimer’s care) are included in the definition of an in-home setting. To be clear, Medicare Advantage plans will not cover the cost of room and board in an assisted living facility or memory care unit. Only the cost of supplemental health care benefits, such as personal care assistance, will be covered.

In addition, CMS does not provide a clear definition of “health care benefits”, and therefore, it is also left to some interpretation. That said, at this time, the following criteria are thought to meet the conditions of a covered supplemental health care benefit: Services and / or items prevent or treat an accident or injury, they offer assistance with a functional or psychological need, or they decrease the likelihood of requiring emergency healthcare assistance. In addition, supplemental health benefits must be deemed medically necessary for the recipient.

Since CMS released the new rules only a few months prior to the finalization of Medicare Advantage plans for 2019, the availability of supplemental health care benefits in 2019 might be limited. However, it is expected that in 2020, many MA plans will offer a wide variety of new supplemental health care benefits, which may include the following:

  • Adult Day Care
  • Meal Delivery
  • Assistance with Activities of Daily Living (bathing, personal hygiene, dressing, mobility, transitioning, preparation of meals, light housecleaning)
  • Palliative Care
  • Home Modifications (addition of grab bars, stair lifts, and wheelchair ramps)
  • Safety Devices (personal emergency response systems)
  • Medical & Non-Medical Transportation
  • Respite Care
  • Alternative Treatments (such as acupuncture and therapeutic massage)

Eligibility

In order to be eligible for Original Medicare (Medicare Part A and Medicare Part B), and hence, Medicare Advantage, one must meet ONE of the following requirements:

  • Be 65 years old or older
  • Be under 65 years old and permanently disabled
  • Be under 65 years old and have end-stage renal disease or Lou Gehrig’s disease

It’s important to note that one must pay a monthly premium for Medicare Part B. In most cases, as of 2019, this figure is $135.50 / month. Most people do not have to pay a monthly premium for Medicare Part A. This is because most Medicare recipients (or their spouses) have worked a minimum of 10 years and have paid Medicare taxes.

It’s important to note that some Medicare Advantage plans charge a monthly premium. In addition, there is often an annual deductible, as well as co-payments, which holds true for both Original Medicare and Medicare Advantage plans. However, Medicare Advantage plans, unlike Original Medicare, do have annual out-of-pocket maximums based on one’s plan. Once the maximum has been met, the Medicare Advantage plan will pick up 100% of the costs for the remainder of the year.

How to Apply / Learn More

Enrollment in Original Medicare is automatic when you turn 65 years old if you receive Social Security benefits or Railroad Retirement Boards benefits. However, if you do not receive one of the two benefits mentioned above, you must enroll in Medicare. To learn more about Medicare enrollment, click here, or to apply, click here. For information in enrolling in a Medicare Advantage plan, click here. Alternatively, you can call Medicare at 1-800-633-4227 for more information.

For more information on Medicare Advantage and the changes coming in 2020, read the following guides: