Medicare Advantage Prescription Drug Plans (MAPD) are also known as Medicare Part C. These plans provide a way for you to receive your Medicare Part A hospital coverage, Medicare Part B medical coverage, and your Medicare Part D Prescription Drug coverage from a private insurance company. If you don’t have an MAPD Plan or Medicare Supplement Plan, you will be insured with the federally run Medicare Part A and B programs.
MAPD coverage
There are several other names that MAPD plans have been called: “All in One Plans,” “Zero Premium Plans,” “Replacement to Medicare,” and “Private Medicare Insurance.”
Private insurance companies sponsor these plans to provide you with Medicare coverage and by adding additional benefits, such as Max Out of Pocket (MOOP) costs, copayments instead of deductibles, and Part D prescription drug coverage. Many companies have gone even further and provide even more additional benefits. Some of these benefits could be dental coverage, fitness benefits, transportation (rides to and from doctor appointments), money to spend on Over the Counter (OTC) drugs and supplies, money towards eyeglasses, and hearing aids.
MAPD plans were not created to pay for all your deductibles, coinsurance, and copayments left behind by Medicare Part A and B. These companies take over managing your health care and receive money every month from Medicare to do this. After all, how else would they be able to offer insurance coverage with no premium?
Why use private insurance companies?
You may be asking yourself, why would Medicare do such a thing? Why would they send money to a private insurance company to take over managing your health care? It is similar to outsourcing.
Medicare would like to save money over time, so they looked at the most cost-effective ways to save money. It often saves them money to pay a private insurance company to manage your health care rather than pay for your medical expenses. The insurance company wants to maximize their profits, so they assign a team of people to check for fraud, waste, and abuse in the system. Original Medicare attempts to do this; however, as of 2018, there were 60 million people eligible for Medicare. That’s a lot of claims to check on.
It is more manageable to have private insurance companies to oversee some of the people’s health care. Approximately 20 million people who were eligible for Medicare choose to enroll in an MAPD plan. Those 20 million people have insurance coverage through dozens of private insurance companies. Those companies took the federal government’s burden for managing those people’s health care and checking for fraudulent claims.
Costs for MAPD Plans
It’s clear that MAPD plans are becoming more popular now that one-third of all Medicare beneficiaries are on this type of plan. Just five years ago, only one-quarter of the number of people (only 5 million) enrolled in these plans.
Where you live will determine what type, if any, MAPD plans are available. Unfortunately, these plans are not as easy to shop for as a Medicare Supplement Plan. That’s because MAPD plans are not standardized. This means that insurance carriers offering an MAPD plan do not need to provide the same copayment structure. To add to the complexity, many insurance carriers will often offer multiple plans to choose from. This means you will need a tremendous amount of knowledge about these plans to understand all of the options available when attempting to decide which insurance plan might suit your needs, finances, and personality.
In Pennsylvania and New Jersey, the common structure for an MAPD plan will include copayments for most services. Some plans will have a $0 copayment for primary care doctor visits, certain generic drugs, and preventative services. Some plans even have a zero premium, which is the cost for the plan itself. For other services, you will be responsible for copayments or coinsurance. Here’s an average range of payment structures for some services in 2020 in Pennsylvania and New Jersey:
- Specialist: $25-$45 per visit
- Hospitalization: $150-$250 per day for days 1-6 and $0 for days after that
- X-rays: $25-$50
- Advanced Imaging: $200-$275
- Skilled Nursing Home: $0 for days 1-20 and $175 a day for days 21-100
- ER: $90 per visit
- Urgent Care: $40-$50 per visit
- Durable Medical Equipment: 20% of cost
- Part B Drugs: 20% of cost
There might be more costs for other services not listed. Depending on where you live in the country, you might have lower or higher out of pocket costs than shown. In some areas, there might not even be an option to insure with an MAPD plan.
Key Takeaways
To summarize, Original Medicare A and B do not cover all of your health care expenses. You have two options:
- You can enroll in a plan that will cover all or most of your medical expenses, but you must pay a monthly fee for service – Medicare Supplement Plan.
- You can enroll in a plan that provides extra coverage but has no monthly fee and then pay for services as needed – MAPD Plan.
At Hitcho Insurance, we work with you to find the best Medicare policy that suits your needs, your goals, and your finances. If you’re looking to enroll in a Medicare Advantage Plan, then give us a call today at (610) 694-9435 and receive a free consultation.
