What are Medicare Replacement Plans?

Medicare replacement plans are private insurance policies that pay healthcare expenses instead of Medicare. The policies are called Medicare Advantage plans and are also called Medicare Part C. These are not Medicare supplement plans and have a completely different benefit structure. If you would like to compare the two types of Medicare plans and discuss which type of plan fits your Medicare needs, give us a call at 844-528-8688

Easy Article Navigation

• How are Medicare Replacement Plans different from Medicare?
• What is a Good Medicare Replacement Plan?
• What are Medicare Replacement Plan Networks?
• How Much does a Medicare Replacement Plan Cost?
• Original Medicare versus a Medicare Replacement Plan
• Who Should Consider Replacing Original Medicare?
• How to Get the Best Rates?

Unlike Medicare Supplement plans (Medigap) which work along with Original Medicare Part A and Medicare Part B, a Medicare Advantage plan actually replaces Medicare.

Although Original Medicare prefers the term Medicare Part C or Medicare Advantage, you really haven’t replaced Original Medicare because you can always go back to it.

How are Medicare Replacement Plans different from Medicare?

When you sign up for Medicare Advantage (Medicare Part C) you are telling Medicare that from now until the end of the year, you want to get your Part A and Part B benefits from a Medicare Advantage plan instead of Medicare.

You are not permanently disenrolling from Medicare by enrolling in a Medicare Advantage plan. You must still be enrolled in Parts A and B before you can enroll in an Advantage plan and you will continue to pay your Medicare Part B premium.

You will always be able to switch back to the Original Medicare program, but you are currently choosing to be part of the Medicare Advantage plan.

Medicare Advantage plans allow members to receive care through a network of doctors and hospitals. As such, providers who accept the plan will not bill Original Medicare for their services.

For example, when you go to the doctor, the doctor’s office will send the invoice to the Medicare Advantage insurance company.

What is a Good Medicare Replacement Plan?

There are many Medicare Replacement Plans (Medicare Advantage Plans) to choose from, and quite frankly, some companies do a better job servicing their policyholders than others.

Choosing the best plan for you will depend mostly on your medical circumstances and your budget for health insurance. Remember, you must continue to pay the Medicare Part B premium as well as your Medicare Advantage premium if there is one.

Most individuals who enroll in a Medicare Advantage plan do so because most plans offer more benefits than you would receive in Medicare Part A and Part B and a stand-alone Medicare Part D prescription drug plan.

With a Medicare Advantage plan, a policyholder can get Parts A, B, and D rolled up into one plan plus additional healthcare coverages like dental, vision, hearing, and fitness membership.

What are Medicare Replacement plan Networks?

The network required by your Medicare Advantage plan is what differentiates one plan from another (besides pricing and additional benefits).

Currently, there are five types of plans in the marketplace and where and how you obtain healthcare services is the primary difference in each plan.

• HMO Plans – With an HMO plan or Health Maintenance Organization, the insurance company requires the policyholder to go use providers who are members of the HMO network. Additionally, these plans typically require the policyholder to select a Primary Care Provider who oversees all aspects of the policyholder’s health care.
• PPO Plans – When enrolled in a PPO plan, the policyholder is encouraged to use only healthcare providers enrolled in the PPO, or preferred provider organization, but can select an out-of-network provider if they are willing to pay a higher cost. A PPO plan does not require the policyholder to have a primary care provider, which means referrals are not required to see a specialist.
• PFFS Plans – The private fee-for-service plan typically offer a full or partial network of healthcare providers to choose from, or, the plans might not use a network at all. No matter the network required, the PFFS plan allows the enrollee to see any provider who accepts Medicare and has agreed to accept that plan’s terms and conditions of payment.
• SNPs – Medicare SNPs are similar to HMOs and PPOs, but they are specific. Medicare SNPs limit membership to people with a certain disease or characteristic. They might tailor their benefits, provider choices, and drug formularies to best meet the needs of the people they serve. Typically an enrollee must get their healthcare services from physicians or hospitals in the SNP network except for emergency care or if the enrollee has end-stage renal disease.
• MSA Plans – Medical Savings Account plans are similar to Health Savings Account plans that are available outside of Original Medicare. MSAs are made up of two specific parts:
• High-deductible health insurance where the deductible must be met before any benefits are payable to the policyholder (deductible varies by plan selected).
• A medical savings account is used to pay for healthcare expenses until you meet your deductible.

Medicare MSA plans must cover all healthcare services that every Medicare Advantage covers and some plans will also cover the extra benefits like dental, vision, and hearing.

How much does a Medicare Replacement Plan Cost?

In 2020, the national average premium for a Medicare Advantage plan was $25 per month plus the Medicare Part B premium which for most enrollees was $170.10 per month.

However, depending on where you live and which insurance company you select for your Medicare Advantage plan, your premium for your Medicare Replacement plan could be as low as $0.00 per month.

Moreover, some Medicare Advantage companies have plans that allow for a refund for part or all of your Medicare Part B monthly premium!

Original Medicare versus a Medicare Replacement Plan

The primary difference between Original Medicare and a Medicare Replacement Plan (Medicare Advantage) is that applicants cannot shop prices with Original Medicare like they can for a Medicare Advantage plan.

Additionally, even though a Medicare Advantage Plan must offer at least the same coverages as Medicare Part A and Part B, Medicare Advantage plans typically offer many more benefits such as prescription drug coverage and dental, vision, and hearing coverage.

Who Should Consider Replacing Original Medicare?

Many seniors who first enroll in Original Medicare Part A and Part B are generally excited about their coverage because they’ve been paying a lot for health insurance. And, although Original Medicare is considered comprehensive coverage, most seniors soon realize the significant out-of-pocket healthcare costs that are a result of deductibles, coinsurance, and copayments.

However, with a Medicare Advantage Plan (Medicare Part C), seniors can get prescription drug, dental, hearing, and vision coverage in a single plan that in some cases will have a zero premium. Moreover, since Medicare Part C is administered by private insurance companies, many of them offer additional benefits as they compete for your business.

How to Get the Best Rates on Your Medicare Replacement Plan

Fortunately, through innovative technical solutions, shopping for a Medicare Advantage Plan has never been quicker or easier.

National independent insurance brokers that represent most of the highly-rated insurance companies, can give experienced advice and submit your application to multiple insurance companies and deliver the best solution according to your circumstances and budget.