Medicare Advantage Article

Medicare Advantage plans available in California 

Medicare Advantage is a Medicare plan sold by private insurance companies in California that replaces Original Medicare Part A and Part B benefits. It bundles together Part A, Part B, Part D (in most cases), and additional supplemental benefits into one plan. It different than Medicare Supplement Plans that work together with Original Medicare and supplements Original Medicare benefits. It is a requirement from the Centers for Medicare and Medicaid Services (CMS), the federal government agency that oversees Medicare, that Medicare Advantage plans must offer benefits equal to or greater than those provided under Medicare Part A and Part B. Most Medicare Advantage plans include many supplemental benefits that are not provided by Original Medicare. These supplemental benefits include things such as dental, vision, hearing, transportation, meal plans, companionship services, fitness memberships, and much more. They also offer lower cost-sharing in the form of co-pays, coinsurance, and deductibles that Original Medicare. Most (but not all) Medicare Advantage plans include Medicare prescription drug coverage, more commonly known Part-D benefits. These all-inclusive Medicare Advantage plans are known as MAPD plans.

Things to consider when choosing a Medicare Advantage plan in California

There are several things to consider when choosing a California Medicare Advantage plan. Before you work with a Medicare insurance advisor who will help you select which Medicare Advantage plan is best for you, it is essential to understand how Medicare Advantage plans work.

Medicare Advantage plans are a type of health insurance you buy from an insurance company licensed approved by CMS to sell California Medicare Advantage plans. It is important to know that when CMS approves a Medicare Advantage plan in California, they do it on a county by county basis. The Medicare Advantage plans available in one county in California may not be available in another. 

There are several specific things you should consider when working with a Medicare advisor to choose a Medicare Advantage plan; some of them include the following:

• Premiums
• Supplemental benefits
• Maximum Out-Of-Pocket (MOOP) limit
• Is your doctor in the plans physician/hospital network
• Co-pays
• Coinsurance
• Deductibles
• Are Part D drugs included?
• STAR Ratings

Every person's situation is unique, so it is vital to work with a licensed and certified Medicare advisor. They can walk you through the details of the Medicare Advantage plans available in your county in California and help you decide which plan is the right fit for you.

Types of Medicare Advantage Plans in California

The most common types of Medicare Advantage plans are the following

• Preferred provider organization (PPO) plans
• Health maintenance organization (HMO) plans
• Health maintenance organization, Point-Of-Service Plans (HMO-POS)
• Dual Eligible Special Needs Plans (D-SNP) – For those eligible for both Medicare and Medicaid

Less common Medicare Advantage plans available in certain situations include:

• Medicare medical savings account plans (MSA)
• Private fee-for-service plans (PFFS)
• Institutional Special Needs Plans (I-SNP)
• Chronic Care Special needs plans (C-SNP)

There are two general categories of Medicare Advantage plans, Medicare Advantage Prescription Drug Plans (MAPD), which include Part-D drug benefits, and Medicare Advantage Only Plans (MA), which do not have Part-D drug benefits. Most of the plans available are MAPD plans. All MSA plans are MA only, and you must purchase a stand-alone Part-D plan to go with them. Other MA only plans are for situations where a member has prescription drug benefits through another source such as the Veterans Administration (VA).

Medicare Advantage STAR Ratings

CMS uses a 5 Star Rating System to measure healthcare outcomes and customer service of Medicare Advantage and Part D plans. Ratings go from one star being the lowest to 5 stars being the highest performing plan. There are several categories that each plan receives ratings for, and an overall rating is given as well. Consumers can use star ratings to compare performance among different insurance companies and benefit plans. Star ratings can also be different for various kinds of Medicare Advantage plans offered by one insurance company. They are usually aggregated by plan types such as HMO or PPO. Star ratings are given out each year at the beginning of the Annual Enrollment Period (AEP), which begins in October each year.

The five categories used to give Medicare Advantage Plans their star ratings are:

• Staying healthy: screenings, tests, and vaccines
• Managing chronic (long-term) conditions
• Plan responsiveness and care
• Member complaints, problems getting services, and choosing to leave the plan
• Health plan customer service

The five categories used to give Stand-alone Part D plans their star ratings are:

• Drug plan customer service
• Member complaints, problems getting services, and choosing to leave the plan
• Member experience with the drug plan
• Drug pricing and patient safety

Your Medicare advisor can provide you with a plans star rating, or you can find them on Medicare’s Plan Finder tool, or you can call 1-800-MEDICARE, and they will provide them as well.

If a Medicare Advantage plan receives less than three stars for three years in a row, that plan will be identified as low-performing. You will be notified if the plan you are enrolled in is identified as low-performing. If that happens, you should consider checking to make sure that plan is still meeting your needs and what other options are available to you. In the future, CMS is changing the model it uses to assign Star ratings and is putting more emphasis on customer experience. There is a special enrollment period allowed for plans that have 5-star ratings. You are entitled to switch from your current plan to a 5 star Medicare Advantage Plan, Medicare Cost Plan, or Medicare Prescription Drug Plan once anytime between December 8th and November 30th. For more information on 5-star Medicare Advantage California, 2021 plans, or to find the highest-rated Medicare Advantage plans in California, ask a Medicare advisor near you. 

What about Part D prescription drugs?

Part D prescription drug plans are considered a type of Medicare Advantage plan, whether they are stand-alone used with Original Medicare, Medicare Supplement plans, or other situations like with an MSA Medicare Advantage plan. It is important to understand that neither Original Medicare nor Medicare Supplement plans cover prescription drugs. To have prescription drug benefits, you will have to purchase a Medicare Advantage plan with Part D built-in (MAPD plan) or a stand-alone Part D plan.

Every Part D prescription drug plan in California must offer a minimum level of benefits defined by CMS. However, the benefits provided by Part D plans can vary from plan to plan by the exact drugs covered, co-pays, coinsurance, and deductibles, premiums, and how the Part D plan is administered.

Part D Formularies

Every Part D plan has a list of covered drugs called a formulary. Medicare provides Part D plans general guidelines for the classes of drugs to be covered but not the specific drugs. Medicare excludes some drugs from their list, but Part D plans are allowed to include them as part of something called an enhanced formulary. In addition to the drugs covered, co-pays, and coinsurance, several other rules about how the drugs are provided and approved are also included in each formulary. The most important are step therapy, prior authorization, and quantity limits.

Part D Formulary Rules

• Step Therapy – This process requires the Part D members to start with the most cost-effective drug and only move on to other, more expensive, or risky medications if necessary.
• Prior Authorization – This process requires Part D members to have the insurance company review and approve some drugs before a prescription is filled to ensure the medication is medically necessary and appropriate for that person’s situation. If you don't get prior authorization for a drug that requires it, that drug may cost you more out-of-pocket, or may not be covered at all.
• Quantity Limits - For both safety and cost reasons, insurance companies can set limits on the quantity of drugs provided in a certain period of time. 

Part D Formulary Tiers

Each drug in a Medicare Part D formulary is put into something called a drug tier. Most formularies have between four and six tiers. A lower-tier drug usually has lower co-pays or coinsurance than a drug in a higher tier.

For example:

• Tier 1 – Lowest co-pay, usually generic drugs
• Tier 2 – Medium co-pay includes some low-cost brand-name drugs
• Tier 3 – Higher co-pay includes brand-name drugs that have generic versions also available
• Tier 4 – Higher-co-pay brand-name drugs, and some specialty drugs
• Tier 5 – Highest co-pay includes high-cost specialty prescription drugs

If your doctor prescribes a drug in a high tier and a similar drug is available in a lower-tier at a lower price, you are allowed to ask your insurance company for an exception to get the lower co-pay.

Medicare Part D Out-Of-Pocket Costs

Your Part D out-of-pocket cost can vary from plan to plan and from one insurance company to another. What your total out-of-pocket costs will depend on the prescriptions you take and several other factors. Part D out-of-pocket costs include things like:

• Co-pays
• Coinsurance
• Annual deductible (not all plans have deductibles)
• Costs in the coverage gap also known as the donut hole (details on your costs in the donut hole can be found here)
• Part D late enrollment penalty if applicable
• Costs if you get Extra Help (also known as Low-Income Subsidy)

Your Part-D out-of-pocket cost will also vary depending on:

• The drugs you take
• The specific plan you enroll in
• Whether you go to a physical pharmacy store or get your medications through mail order
• Whether the drugs take are covered by the formulary

Part D Extra Help, also known as Low-Income Subsidy (LIS)

Some Medicare beneficiaries qualify for a low-income subsidy, which helps with their Part-D costs. The annual value of the Low-Income Subsidy (LIS) is estimated to be about $5,000. To be eligible for LIS, you must be enrolled in Medicare, be within certain income and assets limits, and reside in one of the 50 States or the District of Columbia. You can qualify for one of four LIS levels for 25%, 50%, 75%, or 100% LIS. LIS extra help reduces Part D premiums, co-pays, and coinsurance, and can reduce or eliminate the Part-D late enrollment penalty. The LIS applies to both stand-alone Part-D plans and the Part-D segment of MAPD plans. To find out if you are eligible for LIS, talk with a Medicare advisor near new you.

Medicare Advantage Enrollment

There are several different times of the year known as Medicare Advantage enrollment periods when you can enroll in, change plans, or disenroll from Medicare Advantage and Part D plans. Which enrollment applies to you can depend on your specific situation.

Medicare Advantage enrollment periods include:

• Initial Enrollment Period (IEP)
• Annual Enrollment Period (AEP)
• Open Enrollment Period (OEP)
• Special Enrollment Periods (SEP)

Your Initial Enrollment Period (IEP) is seven months long and includes the three months before you turn 65, the month you turn 65, and the three months after you turn 65. 

During your IEP, you can:

• Enroll in Medicare (Parts A and B)
• Enroll in a Part-D prescription drug plan
• Enroll in a Medicare Advantage plan 

The Annual Enrollment Period (AEP) starts October 15th and ends December 7th each year. Any changes you make during AEP are effective January 1st of the following year. 

During AEP, you are allowed to make the following changes:

• If you're enrolled in Original Medicare, you can switch to a Medicare Advantage plan or vice versa.
• If you are enrolled in a Medicare Advantage plan with drug coverage (MAPD), change to one without (MA Only) or vice versa.
• You can enroll in or disenroll from a Part-D prescription drug plan.
• You are also allowed to change from the Medicare Advantage plan you are enrolled in a different plan. It can be one offered by the same or another insurance company.

Open enrollment happens every year from January 1st through March 31st. If you are enrolled in a Medicare Advantage plan, this enrollment period allows you to switch to another Medicare Advantage plan or go back to Original Medicare. You are only allowed to make one change during OEP, and it is effective the 1st of the month following the month you submit your application. OEP does not allow you to enroll in a stand-alone Part-D plan if you're in Original Medicare and do not already have a stand-alone Part D plan. You are also not allowed to switch from one stand-alone Part-D plan to another. 

Special Enrollment Periods are designed to deal with the many unique situations that may come up during the year. During a SEP, you can generally switch or drop a Medicare Advantage or Part-D drug plan. How long the SEP lasts and precisely what you are allowed to do during it varies depending on the type of SEP. 

SEP's include things like:

• Loss of employer-based coverage
• Moving out of your plan’s service area
• Moving back to the US after living outside the country
• Moving into or just moved out of a skilled nursing facility or long-term care hospital
• Loss of Medicaid eligibility
• You disenroll from a Medicare Supplement policy and join a Medicare Advantage plan for the first time
• Natural disasters such as hurricanes
• and many more…

Medicare Advantage Eligibility and Premiums

Enrollment in Medicare Advantage plans is not contingent on your health. Insurance companies cannot deny coverage or increase your rates based on your health status when enrolling in a Medicare Advantage plan. This is one main difference, and advantage Medicare Advantage plans have over Medicare Supplements. 

There are two main eligibility conditions to enroll in a Medicare Advantage plan:

• Being enrolled in Medicare Parts A and B
• That you live in the county where the insurance company sells the Medicare Advantage plan you wish to enroll in

Medicare Advantage plans can be very budget-friendly with low or $0 premium plans widely available in California. This may seem counterintuitive; how can I get more benefits than under Original Medicare for potentially less or equal premium with lower out-of-pocket costs? How insurance companies get paid for Medicare Advantage members is a complicated process, but simply put, there are two parts to it. The first is the premium you pay, and the second is the money the CMS pays the insurance company. Because Medicare Advantage plans completely replace Original Medicare, CMS pays the insurance company to take care of those members. That amount varies by location, health, and many other factors. In turn, the insurance company is responsible for all healthcare costs for that Medicare beneficiary. The payment from CMS is significantly more than even the highest premium you pay. The insurance company uses that money and your premiums to pay for all of your benefits, including the additional supplemental benefits they provide. They can do this by closely managing members' care and negotiating discounts with doctors, hospitals, and drug companies. It is important to remember that in addition to the Medicare Advantage premium you pay to the insurance company, you will still have to pay your Medicare Part B premium and Part A premium if applicable.

Medicare can be complicated, and understanding your options and what is right for your specific situation can be daunting. For this reason, you should work with a Medicare Advisor to identify the Medicare Advantage plan in California that is the right fit for you.