How Do Medicare Advantage Plans Work? - Zupnick Associates

by Saad Imran )

Medicare Advantage Plans or Part C are health insurance plans offered by private health insurance companies and are approved by Medicare. These plans include the benefits offered by Part A (hospital visits), Part B (doctor visits and outpatient services) and may also include Part D (prescription drug costs). 

These plans may include coverage of issues which are not covered under Part A and B such as dental and vision care, fitness memberships and hearing aids etc. 

The following types of Advantage Plans are offered: 

  • Health Maintenance Organization (HMO)
  • Preferred Provider Organization (PPO)
  • Private Fee for Service Plan (PFFS) 
  • Special Needs Plan (SNP)
  • HMO Point-of-service Plans
  • Medical Savings Account (MSA) 

To enroll in Part C, you have to be enrolled in both Part A and Part B. Some of the leading providers of Advantage Plans are Highmark, Kaiser Foundation, Humana and UnitedHealthcare. 

Introduced in 2003, Advantage Plans have become the preferred choice over Original Medicare for many people. According to a survey, 35% of the people with Medicare choose Advantage Plans.

Group Medicare Advantage Plans

Group Medicare Advantage Plans or Employer Group Waiver Plans (EGWP) are health insurance plans offered by the employer to their retirees as part of their employee benefits program. 

According to a survey, nearly 76% of EGWPs are PPO plans. EGWP cover the following parts of Medicare: 

  • Part A (which covers hospital care and other hospital costs)
  • Part B (which covers doctor visits and emergency care costs)
  • Part D (which covers the most cost for generic medicines and some cost for name-brand medicines) 

These plans are managed by private insurers handling your retirees’ Medicare advantages. EGWP offers even more benefits than advantage plans and provides low out-of-pocket costs, health education, and other benefits such as:

  • Seamless Transition from an Active to a Retiree. As an employer, you can adjust the active employee benefits according to the requirements of Medicare easily. In this way, you can make sure low out-of-pocket costs and other retirement benefits remain the same.
  • Managing Drug Spending and Other Costs. While designing an EGWP, you can control drug spending by your retired employees so that it causes less disruption to them and ensures you receive your entitled government subsidies. 
  • Safety of Your Retirees. Programs such as Advanced Opioid Management ensure that your retirees remain safe from slipping into harmful practices such as opioid drug addictions due to lack of sufficient medical coverage. 

When a retiree has coverage under both Medicare and EGWP, the costs are paid by the EGWP provider first, and then the remaining costs are paid by Medicare. To understand how Medicare works with employer coverage, read this article

Qualifying Factors in Employees 

If your employee is eligible for Medicare Part A, Part B and Part C, he/she will qualify for Group Medicare Advantage Plan. To be eligible for Medicare, your employee must:

1) Be a US citizen or permanent resident for the last five years.

2) Have received Social Security benefits or Railroad Retirement Benefits.

3) Be over the age of 65.

Employees who are younger than 65 may still be eligible for Medicare if:

  • They are entitled to Social Security Disability for more than twenty-four months.
  • They receive a Railroad Retirement Board Pension.  
  • They are or had been diagnosed with amyotrophic lateral sclerosis (ALS) disease.
  • They have been diagnosed with end-stage renal disease and require dialysis. 


Benefits of Medicare Advantage Plans over Original Medicare

Choosing Medicare Advantage Plans over Original Medicare has the following benefits:

  • Advantage Plans Cost Less. When you enroll in an advantage plan, you pay an additional premium along with the premium of Part B. The premium can be as little as $0. Cost-sharing is also low under the advantage plan. 
  • These Plans Take Care of All your Medical Needs. Whether you need a vision or dental care, prescription drugs or need to cover out-of-pocket costs, an advantage plan takes care of it all. With an HMO, you can also coordinate between medical professionals easily. 
  • Advantage Plans Have More Features. Some of the plans also cover travel costs for doctor visits or provide transport facilities for these visits. These plans also offer coverage when you are travelling overseas. 

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