Medicare and Medicare Advantage offers the patient two essential options that can help them over a long period. Once your employees are 65, they can sign up for a federal health insurance plan to help pay for medical necessities. When preparing for this step, they may want to compare original Medicare with Medicare Advantage. The two programs have many similar components, but also some critical differences.
Defining Medicare and Medicare Advantage
The two could present confusing language to the patient. Subsequently, it is essential to understand the terms and what they mean.
Medicare
This government health plan contains two parts: Part A for hospital coverage, and Part B for medical coverage. It covers most services and supplies if they are medically necessary. However, it does not provide benefits such as dental care or eye exams.
The out-of-pocket costs include separate deductibles for each part, plus coinsurance expenses on care. Typically, a person owes 20% of the total amount of each supply or service approved after meeting the deductible. There is no limit on the costs a patient must pay each year for coinsurance.
Medicare Advantage
If you own a business, you can offer your own Advantage plans to provide retiree benefits for your employees. These value-based health plans must provide the same benefits as Parts A and B, but also offer additional coverages like vision, hearing, and dental exams. Private insurance companies provide these government-regulated insurance plans for extended coverage. Many Advantage programs cover the costs of medical care in other countries, too, which the original program does not.
Medicare vs. Medicare Advantage
The coverage people choose depends on their needs and preferences. Some of the noteworthy differences include:
- Choice of doctors: When someone has Medicare, they can seek medical treatment from any facility in the United States that accepts this kind of insurance. With Advantage, they choose from a network of designated hospitals and doctors who provide value-based care.
- Coinsurance vs. copays: With basic coverage, insurance holders pay a percentage of the total cost of all medical services. Employees with an Advantage plan pay a fixed copay instead.
- Specialist referrals: With a regular plan, patients do not usually need a referral to see a specialist, nor do they have to get preapproval for services. An Advantage plan may require both specialist referrals and preapprovals.
- Prescription drugs: The regular program does not include prescription drug coverage, although people can pay extra for this benefit, called Part D. Advantage typically contains this benefit within the plan, eliminating the need for an extra program.
Medigap Coverage
Because people must continue to pay coinsurance for every service with basic plans, they may choose to add a Medigap plan to help cover out-of-pocket costs. With Advantage, they do not need this gap coverage.
Adding a Medicare Advantage plan to your group coverage can provide essential benefits for your employees that protect their health and well-being. Discuss your options with our experts to further understand the differences between this coverage and the original program.
About Brooks, Todd & McNeil
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