Does Medicare Advantage Pay Instead of Original Medicare?
Medicare Advantage is growing in popularity among Medicare beneficiaries, with enrollment doubling over the past decade. But a common question that arises is – do Medicare Advantage Plans actually pay your claims and provide benefits instead of Original Medicare?
The answer is no – Medicare Advantage Plans do not pay your claims or provide benefits in place of Medicare itself. However, Medicare Advantage offers a different way to obtain your Medicare coverage through private health plans.
In this comprehensive guide, we’ll explain how Medicare Advantage coordinates with Original Medicare, how benefits are funded, and the role of Medicare Advantage Plans vs. Medicare for coverage.
Medicare Advantage Plan Basics
First, a quick recap of what Medicare Advantage entails:
- Also called Medicare Part C
- Plans offered by private insurance companies
- Provide all Medicare Part A and Part B benefits
- Often include extra benefits not covered by Original Medicare
- Most Medicare Advantage Plans provide Part D prescription drug coverage
Medicare Advantage Plans are an alternative way for Medicare beneficiaries to receive their Medicare benefits compared to Original Medicare. But importantly, the core coverage is still funded by Medicare itself.
How Medicare Advantage Plans Work
Here is an overview of how Medicare Advantage Plans coordinate with Original Medicare:
- Medicare pays the plan a set amount per member each month
- Plan must provide at least the same benefits as Original Medicare
- Plan administers benefits and pays your claims
- You pay your Part B premium to Medicare
- You may owe copays or coinsurance to the Medicare Advantage Plan
So Medicare provides funding for each Medicare Advantage member upfront every month. The plan then manages your benefits and handles paying healthcare providers for services.
Original Medicare is still paying for coverage in the background. But the Medicare Advantage Plan cover or takes over administration of benefits.
Do Medicare Advantage Plans Pay Claims?
Yes, Medicare Advantage Plans ultimately pay your medical claims and reimburse providers for services:
- Plan pays Medicare providers based on contractual rates
- Payments are made by the Medicare Advantage insurance company
- You may owe cost-sharing amounts to the plan cover based on benefit terms
- Providers submit claims directly to the Medicare Advantage Plan
Medicare Advantage Plans also negotiate their own contracted rates with hospitals, doctors and facilities in their network. This allows them to establish their own reimbursement amounts.
So while Original Medicare is funding your core benefits, the Medicare Advantage carrier handles administering benefits and paying claims.
Original Medicare vs. Medicare Advantage
There are some key differences in how Original Medicare works compared to Medicare Advantage:
- Medicare pays doctors/hospitals directly for services
- You pay 20% coinsurance for most services
- You owe Medicare deductibles
- You can see any Medicare provider nationwide
- Supplemental plans help pay out-of-pocket costs
- Plan pays doctors/hospitals based on contracted rates
- You pay copays or coinsurance set by plan
- Plans may include deductibles
- Networks limit you to certain providers
- Maximum out-of-pocket limit protects against high costs
While both programs rely on Medicare funding, there are important distinctions in how benefits are administered, accessed and paid for.
Do Medicare Advantage Plans Replace Medicare?
An important clarification is that Medicare Advantage Plans do not replace your core Medicare coverage – they provide that coverage through a private insurer.
Medicare still pays the plan a monthly amount for your Part A and Part B benefits. It does not stop coverage for members who enroll in a Medicare Advantage Plan.
Some key facts:
- You must continue paying your Part B monthly premium to remain enrolled in Medicare
- Medicare still provides funding for your coverage if you join a Medicare Advantage Plan
- The plan cannot cancel your Medicare benefits
- You retain Medicare rights and protections
Medicare Advantage enrollment serves as an alternate delivery system for your Medicare benefits – not as a replacement for Medicare itself.
Can I Disenroll from a Medicare Advantage Plan?
Yes – you always have the right to disenroll from a Medicare Advantage Plan and return to Original Medicare.
- There are designated times like Medicare open enrollment when you can switch
- You cannot be forced to stay enrolled in a Medicare Advantage Plan
- Your Medicare benefits remain intact when you disenroll
- Any penalties or exclusions for disenrolling apply to the Medicare Advantage Plan only
You always have the option to go back to Original Medicare coverage. Your underlying Medicare benefits do not change regardless of whether you are enrolled in a Medicare Advantage Plan or using traditional Medicare.
Does Medicare Pay for Medicare Advantage?
In a sense, yes – Medicare does help fund Medicare Advantage Plan benefits. Here’s how it works:
- Plans bid to provide Medicare coverage in a region
- Medicare calculates a benchmark amount per person in that region
- Plans bidding below the benchmark get a rebate from Medicare
- Rebate must be used to provide extra benefits not covered by Medicare
So Medicare essentially shares savings with plans that offer Medicare coverage at lower costs in a region. This funding helps plans provide dental, vision, hearing and other supplemental benefits beyond what you get with Original Medicare.
Can I See Any Doctor With Medicare Advantage?
No – unlike Original Medicare, Medicare Advantage Plans have provider networks you are typically limited to:
- Each plan has a contracted network of doctors, hospitals and providers
- Except in emergencies, you usually must see in-network providers
- Plans may require referrals to see specialists
- Seeing out-of-network providers results in higher out-of-pocket costs
Some Medicare Advantage Plans like PPOs offer out-of-network coverage but usually at a greater cost to you. HMOs tend to strictly limit coverage to the plan’s network.
- Medicare Advantage Plans work with – not in place of – Original Medicare
- Medicare provides funding for Medicare Advantage coverage
- Plans administer benefits and pay your claims once enrolled
- You can disenroll and switch back to Original Medicare at certain times
- Provider networks are more limited compared to Original Medicare
So while Medicare Advantage Plans handle managing your benefits and paying providers, participation in Medicare itself remains intact in the background. But the plan’s involvement means some trade-offs in costs, providers and convenience.
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Does a Medicare Advantage Plan pay instead of Original Medicare?
Yes, a Medicare Advantage Plan pays instead of Original Medicare. When you enroll in a Medicare Advantage Plan, you will receive all of your Medicare benefits through the plan.
What is the difference between Original Medicare and Medicare Advantage?
The main difference between Original Medicare and Medicare Advantage is how the benefits are delivered. With Original Medicare, you receive your benefits directly from the government. With Medicare Advantage, you receive your benefits through a private insurance company that is approved by Medicare.
Do all healthcare providers accept Medicare?
Not all healthcare providers accept Medicare. However, most providers that accept Medicare also accept Medicare Advantage Plans. It’s always a good idea to check with your healthcare provider to make sure they accept your specific plan.
What should I consider when choosing between Original Medicare and Medicare Advantage?
When choosing between Original Medicare and Medicare Advantage, you should consider factors such as cost, coverage options, provider network, prescription drug coverage, and any additional benefits that may be offered.
Can I switch from Original Medicare to a Medicare Advantage Plan?
Yes, you can switch from Original Medicare to a Medicare Advantage Plan during the annual Medicare Advantage Open Enrollment Period, which typically occurs from October 15th to December 7th.
Can I have both Original Medicare and a Medicare Advantage Plan?
No, you cannot have both Original Medicare and a Medicare Advantage Plan at the same time. You must choose one or the other.
What does Medicare Advantage cover?
Medicare Advantage Plans include or cover all the same services as Original Medicare, including hospital stays, doctor visits, and outpatient care. Many Medicare Advantage Plans also include additional benefits such as prescription drug coverage, vision, dental, and hearing coverage.
Does Original Medicare cover prescription drugs?
No, Original Medicare does not cover prescription drugs. However, you can enroll in a separate Medicare Part D prescription drug plan to get coverage for your medications.
What types of Medicare Advantage Plans are available?
A There are several types of Medicare Advantage Plans available, including Health Maintenance Organization (HMO) plans, Preferred Provider Organization (PPO) plans, Private Fee-for-Service (PFFS) plans, and Special Needs Plans (SNPs).
What does Medicare Part B cover?
Medicare Part B covers medical services and supplies that are necessary to treat your medical condition, including doctor visits, outpatient care, preventive services, and durable medical equipment.
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