Medicare and managed care plans offer healthcare coverage but work differently and have unique benefits and limitations. If you’re navigating Medicare enrollment or considering switching to managed care, understanding these differences can help you decide which plan best suits your health needs and financial situation.
It is always appropriate to talk to a trusted advisor representing multiple options. Many independent insurance agents can advise and help price a variety of choices. It is important not to be coerced into an insurance plan.
What is Medicare?
Medicare is a federal health insurance program primarily for individuals aged 65 and older, as well as some younger people with disabilities. The program has different parts:
- Medicare Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing facility care, and some home health care.
- Medicare Part B (Medical Insurance): Covers outpatient care, preventive services, and medical supplies.
- Medicare Part D (Prescription Drug Coverage): Helps cover the cost of prescription drugs.
- Medicare Part C (Medicare Advantage): Managed care plans offered by private insurers that bundle Parts A, B, and often D.
Medicare coverage is often referred to as “Original Medicare” when you enroll in Parts A and B directly through the government.
What is Managed Care?
Managed care plans are healthcare plans offered through private insurance companies. These plans, including Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs), focus on coordinating care through a network of providers to offer comprehensive health services. When you choose Medicare Advantage (Medicare Part C), you’re actually enrolling in a managed care plan for your Medicare benefits.
Managed care aims to:
- Provide lower costs by restricting networks to select providers.
- Encourage preventive care and coordinated treatment to improve health outcomes.
- Control healthcare costs by negotiating fixed rates with providers.
In addition to Medicare Advantage, private managed care plans are available to people of all ages, often through employer-sponsored insurance or the Health Insurance Marketplace.
Key Differences Between Medicare and Managed Care
- Provider Network and Access to Care
Original Medicare allows you to visit any doctor or hospital that accepts Medicare nationwide, providing flexibility in choosing your healthcare providers. This is beneficial if you have existing relationships with certain doctors or if you travel frequently.
Managed care plans, including Medicare Advantage HMOs and PPOs, restrict care to a network of specific doctors and facilities. These networks are often local, which can be limiting if you travel frequently or live in an area with limited in-network options. Managed care plans may also require referrals to see specialists, especially in HMOs.
- Cost Structure
Medicare has set premiums, deductibles, and 20% coinsurance for most services. You may face higher out-of-pocket costs, especially if you don’t have supplemental coverage (Medigap).
Managed care plans tend to have lower monthly premiums than original Medicare plans with a Medigap plan. They also offer out-of-pocket maximums, limiting yearly expenses, but you may encounter higher co-pays for specific services. Some plans cover additional benefits like dental and vision, saving you money.
- Additional Benefits and Wellness Programs
Medicare (Original Medicare) covers essential medical services but does not include extras like vision, dental, or wellness programs.
Managed Care plans (Medicare Advantage) often provide coverage for services not included in Original Medicare. These extras can be valuable if you regularly need these services, but if you only need them occasionally, the higher co-pays for certain medical services might outweigh the added benefits.
Is One Better Than the Other?
There is no one-size-fits-all answer. Choosing between Original Medicare and a managed care plan depends on your health needs, budget, and preferences for healthcare access:
Original Medicare may be better if you prefer flexibility, travel often, or want access to any doctor who accepts Medicare.
Managed Care (Medicare Advantage) plans may suit you if you value lower monthly premiums, want extra benefits like dental and vision, and are comfortable with the network restrictions.
Is This the Time of Year to Make a Choice?
There is no doubt that all of this information is overwhelming and very confusing. Most people need help understanding and choosing the right program. You may be receiving many phone calls offering advice on your insurance coverage. Television ads are constantly on trying to get you to call. It may be preferable for you to talk to a trusted advisor like your local Area on Aging.
Yes, the Medicare Annual Enrollment Period (AEP) occurs every year from October 15 to December 7. During this time, you can:
– Enroll in or switch from Original Medicare to Medicare Advantage.
– Switch from one Medicare Advantage plan to another.
– Add or change a Medicare Part D (prescription drug) plan.
If you miss this period, the next chance to change Medicare Advantage plans is during the Medicare Advantage Open Enrollment Period, which runs from January 1 to March 31.
Can You Change Your Mind if You Choose One?
Yes, you have options to change plans if you find your initial choice doesn’t meet your needs:
Medicare Advantage Open Enrollment (January 1 – March 31) If you’re already in a Medicare Advantage plan, you can switch to another Medicare Advantage plan or return to Original Medicare.
Special Enrollment Periods (SEPs) Certain life events, such as moving or losing other coverage, allow you to change plans outside of the usual enrollment periods.
What to Consider When Choosing Between Medicare and Managed Care
- Your Health Needs: If you have specific doctors or need specialized care, check whether they’re available within a managed care network.
- Budget and Out-of-Pocket Costs: Consider monthly premiums, co-pays, and out-of-pocket maximums.
- Extra Benefits: If dental, vision, and wellness benefits are important, managed care may offer these at a lower overall cost.
- Your Preferred Level of Control and Flexibility: Original Medicare offers more freedom to choose providers, while managed care plans emphasize network coordination and cost management.
Does Medicare or Managed Care pay for Retirement Living?
Many Seniors and their families are confused about this issue. Long-term Care Insurance is the program that often pays for Assisted Living and Skilled Nursing Care. These policies are usually purchased at a younger age and are used when specific criteria are met.
It’s important to know that Original Medicare does not typically cover the costs of Assisted Living or Residential Communities that provide custodial or personal care. Original Medicare generally covers medically necessary services and some home health care but does not cover the room and board costs associated with Assisted Living facilities. However, certain Medicare Advantage plans (managed care) may offer limited benefits related to Assisted Living, such as coverage for wellness programs, transportation, or specific in-home health services. These benefits vary significantly by plan and region, so reviewing each plan’s offerings closely is essential. For broader support with Assisted Living, Medicaid may provide coverage in some cases for those who meet eligibility criteria, but this is often restricted and state-specific.
Make an Informed Choice
Choosing between Medicare and managed care isn’t about one being inherently “better” than the other; it’s about what aligns best with your individual healthcare needs, financial priorities, and personal preferences. By understanding the differences in cost structures, provider access, and benefits, you can make a choice that optimally supports your well-being and peace of mind. For more information, you can visit https://www.medicare.gov/ or call 1-800-MEDICARE or talk with your current insurance provider about options.
Be sure to watch our Adventures in Aging segments on Fox 43!
Call McCrite Plaza in Briarcliff-Kansas City at (816) 888-7930 or (785) 267-2960 in Topeka, or complete the contact form below.
Contact Us
