One choice you have when you get the Medicare card for your 65th birthday, is whether to participate in traditional Medicare (Parts A and B, described in previous articles) or instead choose Medicare Part C, now called Medicare Advantage.
In Medicare Advantage you choose a private health insurance plan which is partially or wholly paid for by Medicare. You pay your Part B premium plus any premium charged by the private plan. Instead of giving providers a Medicare card, you would use your plan’s card. There are several types of plans.
- Health Maintenance Organization (HMO) requires all covered services to be in-network; no coverage outside network; usually requires referral by primary doctor to see specialists; usually offers drug benefit.
- Point of Service (POS) network of preferred providers; has reduced out-of-network benefits; usually requires referral for specialists; sometimes offers drug benefit.
- Preferred Providers Organization (PPO) similar to POS, but usually covers larger area; usually does not require referral, may or may not offer drug benefit. MagnaCare, which is offered as part of Local 802’s plan, is a PPO.
- Provider Sponsored Organization (PSO) similar to POS without insurance middleman; organized by providers who practice in a regional or community hospital; may or may not require referral; usually offers drug benefit.
- Private Fee for Service (PFFS) no network restrictions; usually a deductible and then pays percentage of fees charged.
- Medical Savings Account (MSA) a tax-sheltered savings account used to save money for medical expenses; intended to be used with high-deductible plans to offset cost of deductible.
Medicare Advantage plans often offer broader coverage than traditional Medicare, such as routine physical exams, chiropractic and preventive care. Some charge no premium, leaving you responsible only for the Part B premium. Others charge a premium but the combined premiums are often less than the Part B premium plus a Medigap policy. You do not have to pay Part A and B deductibles and co-pays, but the private plans usually have their own. You cannot use a Medigap policy to cover deductibles and co-pays on a private plan.
Local 802 trumpet player Lowell Hershey told me, “I would likely use Part A and B with a Medigap policy, but I would consider a Medicare Advantage policy even if it costs more. I am willing to pay more for better coverage since health care costs seem to be rising so fast.”
Remember, as long as you are covered by the Local 802 Health Plan, it is your primary insurance. You would not need to enroll in Part B or Medicare Advantage until before your Local 802 coverage runs out after you retire completely.
The downside of Medicare Advantage may include restrictions on choice of doctors, and coverage is often regional, making it difficult for people who travel. Additionally, the Government Accountability Office found that certain services like home health care and some hospital stays are more expensive in private plans because they are excluded from caps on out-of-pocket expenses.
Also, some plans classify certain drugs like those used to treat multiple sclerosis or hepatitis C as “Tier 4,” meaning a co-pay of as much as 30 percent of up to $100,000 instead of a flat co-pay of, say, $25.
Read the fine print before signing up to make sure a particular plan meets your needs.
Learn more by going to www.medicare.gov or call the Local 802 Musicians’ Assistance Program at (212) 397-4802.
P.S. Some of the Medicare premiums I wrote about in last month’s article are going up. E-mail me at firstname.lastname@example.org for more information.
Martha Hyde is a multi-woodwind player who performs on Broadway. A member of Local 802, she is also a trustee on the Local 802 Health Benefits Fund.