It’s Thursday afternoon, and the hospital caseworker tells you that your father is being discharged the next day. She gives you a list of 20 facilities in the area and asks if you have a preference. Now imagine that she comes back the next morning and tells you that the three facilities you chose are not options because your father has a Medicare Advantage Plan, which is accepted only at the facility an hour away.
Medicare Advantage Plans, managed care plans run by for-profit insurance companies, are otherwise known as Medicare Part C. They offer many advantages for healthier seniors. They have minimal co-pays and deductibles for certain services and generally cover services that traditional Medicare does not.
However, there are significant drawbacks to these plans. They are managed care plans, which means the insurance company makes decisions regarding coverage and restricts your choice of providers. This can be especially problematic when you need a specialist. Costs for out-of-network providers can end up being substantially higher than the out-of-pocket expenses in traditional Medicare.
We have also found that our clients who have Medicare Part C have quite limited choices when it comes to picking the rehab facility to go to after a hospitalization. Moreover, we have found that managed care plans tend to cut off rehab stays quicker than the provider would themselves. With Part C, the insurer decides, whereas with traditional Medicare the facility makes the initial decision when they think Medicare will no longer cover the patient.
It makes sense that insurers would limit coverage, because they are paid a flat rate for each senior enrolled. For this reason, we often recommend that our clients consider switching back to Medicare Part A and B when they need long term care. Unfortunately, one problem is that when seniors go from Medicare Advantage plans to traditional Medicare, they may not be able to get a Medigap (supplement) policy, or it may be quite expensive. Medigap policies must offer Open Enrollment without underwriting when a senior first becomes Medicare eligible, but only in limited situations thereafter. If you have been enrolled in a Medicare Advantage Plan less than a year and want to switch back to traditional Medicare, then you do have a right to return to your Medigap coverage.
Changing Medicare plans or going back to traditional Medicare Parts A and B can happen only under special circumstances or during Open Enrollment, which just started. Open Enrollment runs from October 15 to December 7, and during that period, beneficiaries can switch between plans, add or drop Part D, move from traditional Medicare to Advantage, or the reverse. So now is the time to determine if your current plan is meeting your needs and whether you would be entitled to re-enroll in a Medigap policy if you switched.