As you approach your 65th birthday, you’ll have a big decision to make about your healthcare: Will you choose to be covered by Original Medicare (Medicare Part A and Part B)? Or will you opt for a Medicare Advantage plan?
What You Need to Know:
Michigan has more than 70 Medicare Advantage plans for you to choose from.
Once you’ve enrolled in Medicare Part A and B (Original Medicare), you can enroll in a Medicare Advantage plan, if you want to do so.
What Types of Medicare Advantage Plans Are Available in Michigan?
The state has 74 Medicare Advantage plans,2 divided among five different types: HMOs, PPOs, SNPs, PFFS and MSAs. Let’s look at the pros and cons of each:
- Health maintenance organization (HMO)
HMO premiums are usually the lowest among Medicare Advantage plans. You will be limited to seeing providers within your HMO’s network (except for emergencies) and you’ll need to have a primary care physician who oversees referrals to see a specialist.3
- Preferred provider organization (PPO)
A PPO’s network of providers tends to be larger than for HMOs. Your premium will be higher, but you can see doctors out-of-network and still get some costs covered and you probably won’t need a primary care physician or referrals to see specialists.4
- Special needs plans (SNP)
SNP plans are designed for people with specific ongoing health conditions or disabilities or those who live in an institution. Care must come from your SNP network except in an emergency. You will have a primary care doctor or a care coordinator who provides referrals to most specialists. You can join an SNP at any time.5
The three types of SNPs are:6
Chronic condition special need plan (C-SNP) – if you have one or more severe or disabling chronic conditions.
Dual eligible special need plan (D-SNP) – if you have both Medicare and Medicaid.
Institutional special need plan (I-SNP) – if you live in an institution (such as a nursing home) or require nursing care at home.
- Private fee-for-service (PFFS)
PFFS plans have the most flexibility of the Medicare Advantage plans. You may pay less to see an in-network provider, but you’re free to get care from any provider that agrees to your plan’s payment terms. And you won’t need a primary care physician or referrals to see a specialist.7
- Medical savings accounts (MSA)
Some private insurers offer these Medicare Advantage plans, which work similarly to Health Savings Account (HSA) plans.8 With an MSA, you can choose your providers.
How Can You Get Prescription Drug Coverage with Medicare Advantage?
People who choose Original Medicare have no prescription drug coverage, so they often buy private, standalone Part D drug plans. Prescription drugs are covered under most Medicare Advantage HMOs and PPOs and all SNPs.
It’s important to know that you can’t buy standalone Part D prescription medication coverage with HMOs and PPOs without losing your Medicare Advantage plan. But, PFFS plans don’t necessarily have drug coverage, so you can buy Part D coverage in that case.
Did You Know?
Prescription drugs are covered under most Medicare Advantage plans.
How Do You Choose a Medicare Advantage Plan in Michigan?
Premiums: No matter which Medicare Advantage plan you sign up for, you’ll have two premiums to pay monthly: the premium for your Medicare Part B coverage and the premium for your Medicare Advantage plan.
But some Medicare Advantage plans have no premium, while others will have premiums that vary with the amounts of coinsurance and copayments covered, plus deductibles and out-of-pocket limits. These other costs include:9
- Deductible: The amount you owe for covered healthcare services or prescription drugs before your plan begins to pay. (Keep in mind that not all payments you make necessarily apply to your deductible.)
- Coinsurance: Your share of the costs of covered healthcare services, calculated as a percentage of the covered amount for the service, after you’ve met your deductible.
- Copayment (copay): A fixed amount (for example, $15) you pay for a covered healthcare service. Copays vary depending on the type of service.
- Out-of-pocket maximum: The most you pay during the policy period (usually a year) before your plan begins to pay 100% of the allowed amount.
Plan Benefits: Benefits vary from one insurer to another and even within an insurance company. They can include:
- Prescription drug coverage
- Vision care, such as eye exams and glasses
- Dental care, such as cleanings
- Hearing aids
- Gym membership
- Telehealth visits with providers
- Over-the-counter healthcare products
- Meals, such as meal delivery
Did You Know?
Many Medicare Advantage plans offer benefits, such as vision or dental care, in addition to what Original Medicare provides.
When and How Do You Enroll in a Medicare Advantage Plan?
Unless you have other insurance (such as through your employer), you’ll enroll in Medicare Part A and B in the seven-month period around your 65th birthday. Once that’s done, you can decide to switch from Original Medicare to Medicare Advantage (Part C) and add a Part D plan for your drug coverage, if you’re able. (SNP plans may have additional requirements.)
You also must live where the Part C plan you’ve selected is sold and be a U.S. citizen or permanent legal resident who has lived in the U.S. for five straight years.
Initial Enrollment Period (IEP): You can enroll in a Medicare Advantage plan during the seven-month period that starts three months before you turn 65 and ends three months after the month of your 65th birthday. Everyone can enroll in this period if they have Original Medicare.
Annual Election Period (AEP): This is commonly called “Open Enrollment” and runs from October 15 through December 7 each year (not to be confused with the OEP, explained below). Anyone can enroll in a Medicare Advantage plan for the first time during this period or switch to a different Medicare Advantage plan.
Medicare Advantage Open Enrollment Period (OEP): Every year between January 1 and March 31 you have a second chance to decide on Medicare Advantage. You can change to a new Medicare Advantage plan or switch back to Original Medicare. If you go back to Original Medicare, you can enroll in a standalone Part D prescription drug plan too.
General Enrollment Period (GEP): If you enrolled in Medicare Part B for the first time during the Medicare Advantage Open Enrollment Period (January 1 through March 31), you can join a Medicare Advantage plan anytime between April 1 and June 30 of that same year.
Special Enrollment Period (SEP): In certain situations, such as losing your job or health coverage, you can make changes to your Medicare Advantage plan outside of regular enrollment periods.11
How Much Do Medicare Advantage Plans Cost in Michigan?
In 2020, the average monthly premium for Medicare Advantage plans in the U.S. was $23.63. In Michigan, it was $43.93, which was down by nearly half compared to four years ago. The estimate for 2021 is down another 13% from 2020, to $38.00 per month.12
In Lansing, Michigan, there are 33 Medicare Advantage plans with premiums ranging from nothing to $257 per month for 2021. In Grand Rapids, Michigan, premiums for the 31 available Medicare Advantage plans range from nothing to $260.13
When you get a quote for a Medicare Advantage plan, keep in mind that this might not include any help you get from Medicaid, Supplemental Security Income, Medicare Savings Program or Extra Help from Social Security. You can specify any help you currently receive, as well as the medications you’re taking; adding this information will give you a more precise idea of how much each plan will cover.
As mentioned above, your monthly premium isn’t your only cost, though there are limits to what you’d need to pay out of pocket. In 2020, for HMO enrollees nationwide, the average out-of-pocket limit (in-network) was $4,486; these plans don’t cover any services you receive from out-of-network providers, though.
Local and regional PPOs cover smaller or larger territories. The average out-of-pocket limit for each (for in-network and out-of-network services combined) was $8,795 and $9,010, respectively.
These out-of-pocket limits apply to Medicare Part A and B services only, and not to Part D (prescription drug coverage) costs.14
What Are the Alternatives to Medicare Advantage?
Here are two other options to consider:
Programs of All-Inclusive Care for the Elderly (PACE): If you’re 55 or older, live in an area where PACE has services (which includes Michigan), and are eligible for nursing-home care, this Medicare and Medicaid program may be worth looking into. Your care will be coordinated with various providers, with the goal of helping you stay in the community rather than move to a nursing home.15
Original Medicare: You can always choose to stay with the federal government’s Original Medicare program with Part A (hospital insurance) and Part B (medical insurance). And you can get a private Medicare supplement (or “Medigap”) policy to cover expenses that Original Medicare does not. You also might want a Medicare Part D standalone prescription drug plan, whether you opt for a Medigap policy or not.
What Medicare Resources Are Available in Michigan?
Michigan’s State Health Insurance Assistance Program (SHIP) is called the Medicare/Medicaid Assistance Program (MMAP). You can reach this free counseling service by calling (800) 803-7174, visiting their website or contacting an MMAP counselor.
The Health Insurance Consumer Assistance Program (HICAP) is operated by Michigan’s Department of Insurance and Financial Services to help you with health insurance issues. Call (877) 999-6442 or visit their website.
The Medicare Savings Program is administered by the Michigan Department of Health and Human Services. You could save more than $1,700 each year in Medicare Part B costs; find out if you qualify through MI Bridges.
To find a Medicare Advantage Plan in Michigan once you’re enrolled in Medicare Part A and Part B, consult the Medicare Plan Finder. By answering a few questions, you’ll get a complete list of plans available in your ZIP code. All cost information on premiums, deductibles, copays and out-of-pocket limits will be shown as well.
From there, you can weigh up the costs, coverage and benefits to choose the Medicare Advantage plan that’s right for you.