Hi, I am Matthew Claassen. Welcome to video and number five in our seriesAll AboutMedicare. A series of videos meant to help the people new to Medicare learn all you need to know to make an informed decision about your choices. In this video and the next we’re going to talk about the most important decision that you have to make as you start Medicare. It is important because it will define the quality of coverage you have, the amount of coverage you have. your flexibility and your cost. When you start Medicare you have a choice of keeping yourOriginal MedicareParts A & B,as we’ve talked about previous videos or switching to a Medicare Advantage plan; a private plan run by a for-profit insurance company.Original Medicareis the Medicare Part A & B we talked about in our second video of the series. In this video we’re going to talk aboutMedicareAdvantageplans. In our next video we’re going to discussMedicare Supplement plans. It’s important to understand this is an either/ or situation. You cannot have aMedicareAdvantageplan and a Medicare Supplement. My intent is to put the facts; the pros & cons of each plan type in front of you so that you can make a decision. Just remember that this is not my Health Care. This is not your friends healthcare, it’s not your neighbors Health Care. This isyourHealth Care. What is right for your friends or neighbors is not always what is right for you. I have found quite often that,after having these discussions or the information that we have these videos for you, you’ll find that you may know more about Medicare than many of your friends and neighbors. Not everybody takes the time to research their options as you are already with these videos. So let’s talk about Medicare Advantage plans. If you decide to have a Medicare Advantage plan, that plan replaces your Medicare. It doesn’t enhance it, doesn’t supplement it. It replaces Original Medicare. When you choose a Medicare Advantage Plan, all of the benefits and the appeals processes that are outlined in your Medicare & You guidebook are no longer relevant. Your new benefits will be detailed in your insurance company’s evidence of coverage document. Any changes will be sent to you, typically an October in what is called anAnnual Notice of Change.You no longer need to show your Medicare card to your doctors. You’ll have a new insurance card from your insurance company. If you have questions or you have a problem with one of your services, you can no longer appeal your services to Medicare. Medicare is no longer involved in your day-to-day Health Care. The appeals process has to go through the insurance company that you are now working with.Medicare Advantageplans are typically anHMO; Health MaintenanceOorganization or aPPO, a Preferred Provider Organization. We will go through the details in a minute. First, it’s important to understand that a Medicare Advantage plan is not standardized. Its regulated to meet certain minimum requirements. That’s an important concept, so let me explain. Medicare Part A & B is a standardized plan. Medicare supplements, which we will discuss in the next video, are standardized. Every person in Medicare Part A & B gets the exact same coverage. Everyone in the Medicare Supplement plan has the exact same coverage They could see the same doctors, they will have the same experience. With the Medicare Advantage plan each plan is different. It will have different co-pays, a different cost structure, cover different services in a different manner. It will have a different network of doctors and hospitals that you can see. Everyone in the Medicare Advantage plan is going to have the different experience and that experience will depend on which company that they have chosen in which plan within that company that they’ve chosen. In addition, all those benefits, those co-pays and the doctors can and will change each and every year. It is your responsibility to keep up with those changes via their mandatory Annual Notice of Change and determine how thats going to impact your Health Care in the coming year. Medicare Advantage plans are regulated to meet a certain minimum standard of coverage. That minimum standard of coverage is referred to beingActuarilly Equivalentto Medicare Parts A & Bwithout a supplementActuarially Equivalent;that’s an interesting term. What what exactly does that mean? Well first a Medicare Advantage plan has to cover the same procedures that are covered under Medicare Part A & B, but not necessarily at the same cost.Actuarilly Equivalent means that over a large group of people, everybody on the plan, the average cost for a person is going to be the same as if they had just Medicare Part A & B without a supplement. Well, if the average cost is the same as the Medicare Part A & B that you already have, then by definition that means that half the people with a Medicare Advantage plan are going to have lower costs than if they just had Medicare Parts A & B and half the people will have higher costs than if they just at Medicare Parts A & B. Which half will you be on? So let’s take a look at HMO’s and PPO’s, which make up the vast majority of all Medicare Advantage plans. There are other types of plans You may want to take a look in your Medicare & You guidebook to see what those plans are, and if they are of interest to you. Keep in mind that what I discuss here are generalities. As I mentioned; every plan is different. So please check the specifics of what ever plan that you are researching. An HMO: Health Maintenance Organization. They are known historically for very good preventive care services. With a Medicare HMO you will have to stay within a network of doctors. It’ll be a group of doctors in your local area and perhaps even confined to your county. If you seek Medical Service outside of your network it will be at your cost, at your dime. There is no coverage for out-of-network service. A couple below points to consider; the exception to only in-network coverage would be for emergency care. If you’re out of your county, out of your local service area and you have an emergency, then you will be covered for emergency care. However, check the Evidence of Coverage for how they define emergency care. There are some plans were the definition is restricted to stabilizing you and making sure that your life is no longer in danger. After that point, it is up to you to get back to your service area for additional coverage. For example, if you are you off in another state and you get in an automobile accident, your coverage will pay for making sure that you are stabilized. But even if you’re in traction, it is up to you get back to your service area to have any other additional insurance coverage. That information will not be on theSummary of Benefitsthat an agent will sit down and show you. But it should be in theEvidence of Coverage. So make sure that you understand that when you take a look at this option. A second point to consider is that you will be required to have the Primary Care Physician (PCP). Your Primary Care Physician will direct your healthcare. You cannot see another doctor or go to any other service without a referral from your Primary Care Physician. Doctor visits outside of that, without having permission will not be covered. APPO, orPreferred Provider Organizationis a little bit different than an HMO. You’ll also have the network of coverage that you have to stay within. However, there are some PPO’s called aRegional PPOwhere that network, instead of just being in your county, could be as large as doctors within your state or within a multistate area. In some cases even doctors all across the country that contracted with your insurance company. So you can have a much larger in-network Service area. In addition, the PPO’s will typically also have insurance coverage for out-of-network service, just at a higher cost. A couple bullet points to consider; You may also have a Primary Care Physician. However you will not have to have referrals from your Primary Care Physician in order to have coverage. You should be able to see any doctor or specialist that is in your network. Because the network can be so large as even being multistate, and because you have out-of-network coverage that scenario of being out of state and in an accident is a nonissue. All Medicare Advantage plans have an annual MOOP (M-O-O-P) stands for an annual Maximum Out-Of-Pocket expense. It is the maximum that you will spend through all their co-pays and deductibles before you get 100% coverage. That maximum is calculated on acalendar basis. Please note: that that MOOP refers to covered services. In an HMO, for example, out-of-network service is not covered, therefore there is no MOOP or Maximum-Out-Of-Pocket for out-of-network services. It is all on your dime. Also for those Medicare Advantage plans that have prescription drugs, prescription drugs and those costs are not included in your maximum out-of-pocket expense. Most of those PPO’s the Preferred Provider networks have the different MOOP for in-network service vs. out-of-network service. For example what common right now is that…. an in-network MOOP expense on an annual calendar year bases might be $6700 in-network and $10,000 for out-of-network coverage. The out-of-network service may also have the deductible. Because every Medicare Advantage plan is different, and some companies even have more than one Medicare Advantage plan; comparing plans can be little difficult. We’re going to go over how to compare plans in a momen. First, it is usually at this point in the conversation that I am asked; Why? Why do people choose a Medicare Advantage plan? Keep in mind that the across the country only 3 out of 10 people that enter Medicare will choose a Medicare Advantage plan. In some areas, especially in rural areas, that could be as low as one out of ten people. In my experience the number one reason that people will choose a Medicare Advantage plan over keeping Original Medicare and adding the supplement is economics. Although the cost of the Medicare advantage plan is no different than the cost of Original Medicare, Original Medicare does not have a MOOP. There is no maximum out-of-pocket limit when you have original Medicare without a supplement. Having the Medicare Advantage plan is a great way to set a limit on how much your medical expenses will be, without creating any additional costs. If you’re a senior on a fixed income, or a lower income, or just on a tight budget the Medicare Advantage plan may be the right option for you and should definitely be considered. The number two reason, in my experience, for why people will choose a Medicare Advantage plan over Original Medicare is that they didn’t know they have a choice. I can’t tell you how many times and I have heard “Well, an agent came in to talk to us… they opened up a book, showed us a Medicare Advantage plant. Tols us it’s better than Medicare and it’s free…. and they went ahead and made that decision. No additional research, no looking at all their options. Please be aware that although Medicare Advantage plans have no additional premium to you, they are the highest commission product in Medicare. They pay the agent from 2 to 5 times more than any Medicare Supplement In my opinion if an agent sits down and the first thing out of their book to show you is a Medicare Advanatge plan without first taking a look at your options with a Medicare Supplement, and those costs; You’re likely sitting down with someone who is more concerned with their pocketbook than with your needs. Also, we often you that Medicare Advantage plans are free. Well, they are not technically. You actually pay the same that you pay for your Medicare Part B. If you remember from another video that you have the premium every month that you’ll pay (at least $122 a month as of 2016) You still pay for Part B with a Medicare Advanatge plan. That doesn’t go away. The money goes to the insurance company rather than to Medicare. So, technically, NO a Medicare Advantage plan is not free! The number three a reason that I’ve seen that people will choose a Medicare Advantage plan over Original Medicare are the additional services that are often put in their as teasers. Maybe free dental cleanings for example, or some other services that are giving an impression of broader coverage. Many of those additional services can actually be replaced with a discount plan for which you might pay $10.00 a month. So don’t get lured in by all the little bells and whistles. Focus instead on your primary Health Care will talk about that and we go through comparing plans. If you are like most people this point, you’re wondering; “How does an insurance company offer Health Insurance without charging a premium or just that $122 a month Part B premium?” And to that I will add they not only do that, but they have fancy Marketing Materials they pay the agent or broker many times more than with other plans. They can do that because…. what our U.S. government does, through Medicare, is pay the insurance company between $1,000 in $1,500 a month for every Medicare Advantage Plan they have. That’s $18,000 a year per person! Second is that the insurance company has the right to deny you service if, in their opinion, the service you’re looking for is considerednot medically necessary.You may recall my emphasizing that term; “medically necessary” when we discuss Medicare Parts A & B. Medicare uses your doctor to help determine what is medically necessary for you. Medicare Advantage plans do not. They use their actuaries and other employees to determine what is medically necessary. By doing so, denying you coverage has a positive impact on their bottom line. In addition to PPO’s and HMO’s Medicare Advantage plans also fall into two different categories. There areMAfor Medicare Advantage andMAPDfor Medicare Advantage Prescription Drug Plans. Medicare Advantage plans without prescription drugs were designed mostly for veterans. Veterans, through the VA may have a very good prescription drugs program. They also have a health program, but will often seek out their Medicare as a backup. So the Medicare Advantage plan without a prescription drug plan or a high deductible Medicare Supplement can be a great alternative backup coverage. You should know from our other videos that not having a prescription drug plan or creditable prescription drug coverage will result in a penalty. Thus, other than veterans, most of us will consider the Medicare Advantage Prescription Drug plan when looking at Medicare Advantage plans. However, a very important point;you cannot have a Medicare Advantage plan of any sortand a standalone prescription drugs plan. In fact, whenever you sign up for one it would cancel the other. If you have the Medicare Advantage Plan and you sign up for a standalone prescription drug plan (PDP) Medicare automatically cancels your Medicare Advantage plan. if you have a standalone prescription drug plan and you sign up for Medicare Advantage plan, Medicare automatically cancels your prescription drug plan. The Medicare Advantage Prescription Drug plan is just a Medicare Advantage plan with a bundled prescription drug If you have a Medicare Advantage plan with the prescription drugs plan, you must take that bundled prescription drugs plan. Your prescription drug plan can have its own separate deductible and will have its own separate cost for is drugs its own formulary which is the list of covered drugs. It will be different than all the other prescription drugs plans. As I mentioned earlier…. the money spent on the deductible and the drug for the prescription drug plan does not count towards your MOOP. Let’s talk about the Annual Election Period (AEP). Also known as the Open Enrollment. Because Medicare Advantage plans and prescription drugs plans change each and every year, they are required to send you an Annual Notice of Change in early October. Then you have from October 15 through December 7 to evaluate those changes and decide whether you want to keep that plan or change to a new plan. So that period; October 15 to December 7 is your Annual Election Period (AEP). Or it’s also referred to as Open Enrollment. If you decide that you want to keep a plan that you already have. You like the changes that will be coming in the next year… do nothing. It will automatically roll over. If you’re not comfortable with the changes for the coming year then sit down with an agent. Take a look at all that different plans that are available to you and decide which is going to be best for you. You have from October 15 through December 7 to make that decision. Then your new plan will take affect on January 1. It will go from January 01 to December 31. If during that Open enrollment period you change your mind… any new plan that you choose will automatically cancel your old plan. That is true with both Medicare Advantage and Prescription Drugs plans. So, if you have a Medicare Advantage plan and you apply for a new plan… then someone shows you a different alternative you didn’t know, and you want that one the final application that you make during that open season that open enrollment period will be the plan that you’ll have for the next year. You can only change plans during your annual election period from October 15 through December 7. However, you can cancel a Medicare Advantage plan or a Prescription Drug plan between January 1 and February 14. If you want to change back to Original Medicare, from Medicare Advantage plan, all you need to do is sign up for a standalone prescription drug plan during the annual open enrollment. Your Medicare Advantage plan will automatically be canceled. However, if you’re going to do that and you want a Medicare Supplement, make certain that you qualify for the Medicare Supplement before you make any decisions. We will talk more about that when we talk about Medicare Supplements in the next video. If you have decided that you are more interested in a Medicare Advantage Plan than keeping Original Medicare How do you compare those plans? This is what I suggest; First, decide if you want an HMO or PPO. Because they are different, they provide their Health Care in a different manner you should have a preference of one over the other. Second, check the network. Make sure your doctor is part of that network. If you prefer a PPO, check to see if there’s a Regional PPO available to you. that will provide you with a greater in-network Service. then look at the MOOP the maximum annual out of pocket expense. It might be a good idea to examine what it would cost under certain scenarios. So consider cancer or heart attack What would your plan cover? What would be your out-of-pocket expenses under certain scenarios. Do they cover your prescriptions? Lastly, if two plans are very similar then take a look at the star rating. We talked about star rating in our last video on selecting a prescription drug plans. You also the detail of look at star ratings and how they’re used, how they are measured in the Medicare & You guidebook. Take a look at that as well. If two plans are very similar maybe the one with a better star rating is the option you should consider. In our next video we’re going to discuss the pros and cons of Medicare Supplement plans. If you like our videos and find them informative, chances are others will too. PleaseLIKEand share these videos. If you’re watching this on YouTube.com then take a look at the thumbs up and give the thumbs up. When you do so, it improves the probability that when someone else is looking for answers, just as you are, that they will find this video. Please share with your friends ! I am Matthew Claassen, CMT withMedigapSeminars.org. Thank you for watching!