Planning Guide for Medicare Advantage in 2023

To understand what Medicare Advantage is, start by reviewing Medicare’s four distinct Parts:   

•  Part A – Hospital, hospice and limited skilled nursing  

•  Part B – Physicians, prescriptions administered by a physician, medical equipment and out-patient services 

•  Part C – Managed care plans offered through Medicare Advantage  

•  Part D – Prescription drugs 

Part A and Part B are Original Medicare, and they are the only two Medicare Parts provided by the federal government.  Private health insurance companies offer Part C and Part D plans.   

Original Medicare pays for 80% of covered services. Medicare beneficiaries enroll in a Medigap Plan to cover the 20% cost sharing gap.  Like Part C and Part D Plans, private health insurance companies also provide Medigap Plans. In Massachusetts, Medigap plans are called Medicare Supplement Plans. 

Part C is Medicare Advantage, and it is the managed care alternative to Original Medicare.  Private health insurance companies offer several types of Medicare Advantage Plans including health maintenance organizations (HMOs), preferred provider plans (PPOs), private fee-for-service plans (PFFS) and Special Needs Plans (SNP). Medicare Advantage Plans include prescription drug coverage so there’s no need to have a separate Part D Plan. Medicare Advantage plans can offer benefits like gym memberships, and vision and dental coverage that are not available through Original Medicare. 

The Medicare Advantage Open Enrollment Period is separate from and not the same as the annual fall Medicare Open Enrollment Period. It begins on January 1st and runs through March 31st.

During this time, anyone who is already enrolled in a Medicare Advantage plan has certain options to change their coverage. Those options are limited and different from what’s available during the annual fall open enrollment period. 

Three options are available during the Medicare Advantage Open Enrollment Period.  
You may:   
 

1. Chose another Medicare Advantage Plan; 

2. Switch from Medicare Advantage to Original Medicare; 

3. Choose a Part D Plan if you switch to Original Medicare. 
    

During the Medicare Advantage Open Enrollment Period you may not: 

• Switch from Original Medicare to a Medicare Advantage Plan; or

• Switch to a new Part D Plan if stay enrolled in Original Medicare. 

Several factors including local network coverage, the plan’s prescription drug formulary, and out-of-pocket costs are all reasons to reevaluate your Medicare Advantage Plan. Consider the following: 

• Does the prescription formulary cover the drugs that you take?   

The formulary is the list of drugs covered by the Medicare Advantage Plan’s prescription benefit. 

• Are all of your physicians, hospitals and medical care providers in the Medicare Advantage Plan’s network?   

• Are the Medicare Advantage Plan’s out-of-pocket costs what you expected? 

Out-of-pocket costs for Medicare Advantage Plans include premiums, co-payments or co-insurance and deductibles. 
 

Medicare Advantage Plans can set their own out-of-pocket amounts for Part A and Part B expenses, but each year the federal government sets maximum limits for out-of-pocket expenses.

In 2023, the maximum out-of-pocket limit for in-network Part A and Part B expenses is $8,300, and the maximum out-of-pocket limit for combined total in-network and out-of-network Part A and Part B expenses is $12,450. The combined out-of-pocket maximum often applies to Medicare Advantage PPOs that cover out-of-network providers.

• Massachusetts residents have guaranteed issue rights even after the six month period that follows their Part B enrollment. Guarantee issue rights mean that the private health insurance company offering the Medicare Supplement Plan can’t deny you coverage because of an existing condition or charge you more because of that condition. 

• Remember that the terms Medicare Supplement Plans and Medigap Plans are synonymous. Both are names for health insurance plans that cover the cost sharing gaps in Original Medicare. Medicare Supplement Plans and Medigap Plans are not Part C / Medicare Advantage Plans. 

• The cost sharing gaps in Original Medicare include the Part A and Part B deductibles, Part A co-insurance for hospice and skilled nursing facility care and foreign travel. The benefits provided by Medicare Supplement or Medigap Plans are standardized, i.e. a specific plan will offer specific benefits. The benefits you receive will depend upon the type of Medicare Supplement or Medigap Plan you choose.   

• In Massachusetts, three types of Medicare Supplement Plans are available:  (1) Core; (2) Supplement 1; (3) Supplement 1A. 

1. The Core Medicare Supplement Plan offers only basic benefits and does not cover benefits mandated by Massachusetts law like annual mammograms. 

2. Supplement 1 and Supplement 1A offer a broader range of benefits.  Both cover basic benefits, the Part A in-patient hospital deductible and coinsurance, foreign travel emergencies, 120 days of care in a mental health hospital and state mandated benefits. 

There is one difference between the Supplement 1 and Supplement 1A.  Supplement 1 covers the Part B deductible; Supplement 1A does not. 

Under federal law, individuals who first become eligible to enroll in Medicare after January 1, 2020, cannot purchase a Medicare Supplement or Medigap plan that covers the Part B deductible. Any Massachusetts resident who becomes eligible for Medicare after January 1, 2020, can purchase Medicare Supplement 1A. If you are not a Massachusetts resident, contact your state’s health insurance assistance program (SHIP).  Your state’s SHIP program will be able to explain whether you may have a guaranteed issue right.   Your state’s SHIP program will also help you determine which Medigap Plan is right for you. 

There are 10 types of Medigap Plans. Because individuals who become eligible to enroll in Medicare after January 1, 2020, cannot purchase a Medigap Plan that covers the Part B deductible, only 8 Medigap Plans are available to new enrollees.   

Your new coverage will become effective on the first day of the following month. For example, if you choose a new Medicare Advantage Plan in January, the new plan’s coverage will start on February 1st.

Each state has a SHIP with local resources to answer your Medicare questions. The Massachusetts SHIP is called Serving Health Insurance Needs of Everyone (SHINE), and its contact information is available in this link.