Medicare Advantage enrollees can save nearly $2,000 a year, according to a study from the Better Medicare Alliance. Compared to people enrolled in Original Medicare, Medicare Advantage enrollees have a 35% lower cost burden. This should come as great news to financially strapped seniors, but some enrollees may not see these savings, especially if confusion over networks lead to higher out of pocket costs. To help enrollees get the most value from their plan, it’s important to clear up common Medicare Advantage network misunderstandings.
How Medicare Advantage and Original Medicare Differ
Original Medicare is a fee-for-service health plan. There are no networks, and most providers accept assignment from Medicare. This means that beneficiaries can go to almost any doctor or facility for care.
Medicare Advantage works differently. These are private plans managed by various insurance companies. There are different types of Medicare Advantage plans, including HMOs and PPOs, and most use networks of providers. In a PPO plan, enrollees may pay extra if they go out of network. In an HMO plan, out-of-network services might not be covered at all, although there are exceptions for emergency care and out-of-area urgent care.
Understanding Medicare Advantage Networks
Medicare Advantage plans offer many advantages. In addition to helping enrollees save nearly $2,000 a year in healthcare costs, these plans also tend to offer many additional benefits that aren’t covered under Original Medicare, such as hearing, dental and vision benefits, as well as many others.
Getting more benefits for less money may sound too good to be true, and the reality is that there has to be some sort of tradeoff. Medicare Advantage plans can offer a great value, but to control costs, these plans tend to use networks of providers who have agreed to their terms. Coverage may not be available when enrollees go to a provider or healthcare facility that is not in network, and their out-of-pocket costs may be much higher as a result.
Many Medicare Advantage Enrollees Misunderstand Networks
Networks are common in many types of health plans, but Medicare enrollees are often confused about the requirements. This may be because Original Medicare doesn’t use networks, and some people incorrectly assume that the same is true of all Medicare plans.
This is a big problem. If enrollees don’t realize their plan has network requirements, they may end up receiving care out of network. Then they’ll get hit with big, unexpected bills, and they won’t be happy about it. Whether it’s for a one-time service or ongoing care, staying in-network can be critical to cost control and plan satisfaction.
Medicare Advantage Enrollees May Need Referrals
Another key difference between Original Medicare and Medicare Advantage is whether enrollees need a referral to see a specialist. In Original Medicare, enrollees don’t typically need a referral before seeing a specialist. However, in many Medicare Advantage plans, a referral is required.
This means that beneficiaries may need to consult with their primary care provider before a visit to a specialist will be covered by their Medicare Advantage plan. Specialist care can be especially expensive, so it’s important to follow the plan rules in order to avoid expensive out-of-pocket costs. If they’re not sure whether a service will be covered, they should contact their plan to find out.
Plans Also Have Prescription Drug Formularies
Networks help insurers manage costs for care, and drug formularies do the same for prescription drug plans. Both Medicare Part D prescription drug plans and Medicare Advantage Prescription Drug plans use formularies. Medications that are not listed on the formulary may not be covered. Additionally, many formularies use tiers, and medications in higher tiers may be much more expensive.
If your client is prescribed a drug that isn’t covered by their plan, they can talk to their doctor to see if a covered alternative is available. If not, they may be able to appeal the coverage decision with the plan.
Help Your Clients Navigate Networks
To boost plan satisfaction and retention, it’s absolutely essential to make sure enrollees understand their network requirements.
- Educate your clients about networks and formularies. You don’t want your clients to be surprised by unexpected out-of-network charges, so help them understand their plan requirements ahead of time. This Medicare resource provides useful information that you can share with your clients.
- Encourage your clients to check networks and formularies for their providers, healthcare facilities and prescriptions before selecting a plan, including the expected costs. This is a great way to make sure the plan meets their coverage needs, and it can help clients avoid the unpleasant surprise of realizing their favorite doctor or required prescription isn’t part of their plan.
As the agent, you play a very important role in helping clients choose a plan they will be happy with. Remember to always discuss the three Ds – Doctors, Drugs and Dollars. We’re here to help you help your clients. If you have any questions, contact us.
