Ashford Insurance is an insurance agency helping people with their Medicare in Texas.  We represent our client’s best interest, not that of an insurance company, and our services are free to you the consumer. All you need to do is ask.

Before you make any other decisions with Medicare you must first be enrolled in both Medicare Part A (inpatient services) and Medicare Part B (outpatient services).  This is referred to as Original Medicare. Medicare Part A and Medicare Part B.  From there you can make one of three choices. But keep in mind, no matter which choice you make from here, you must always pay your Medicare Part B monthly premium.

Your first choice is to do nothing.  Just keep Medicare Part A and Medicare Part B as your insurance coverage and add Medicare Part D prescription coverage.  Of course, with just Medicare Part A and Medicare Part B and no other coverage, a person still has unlimited financial risk should they get sick or injured.  Your portion of the medical cost could still result in financial hardship.

Most people are justifiably uncomfortable with having unlimited financial risk in the case of a medical event.

If you want to limit you’re your financial risk, you can either purchase additional coverage via a Medicare supplement plan or replace your Original Medicare with a Privatized version of Medicare Part A and Part B managed by a private, for-profit insurance company.  That is a Medicare Advantage Plan.

To be clear, a Medicare Advantage Plan is not a Medicare supplement.  It does not supplement your Original Medicare, it replaces it.  You still must pay your Medicare Part B monthly premium to Medicare, but you are no longer using Original Medicare.  You don’t use your red, white, and blue Medicare card.  The insurance company you choose for a Medicare Advantage plan will issue you their insurance card for the plan you enrolled in.

As you may know, Original Medicare has a lot of co-pays and deductibles.  Each Medicare Advantage Plan has its own co-pays and deductibles and by law must be designed as an Actuarial Equivalent to Original Medicare.  Actuarial Equivalent.  It’s an interesting term.  What exactly does it mean?  It means that the average person on any Medicare Advantage plan must have roughly the same annual out-of-pocket expense as they would have if they had simply kept their Original Medicare Part A and Part B and NOT added a Medicare supplement.

Unlike a Medicare supplement, every Medicare Advantage plan is different.  Each has different coverage and uses different doctors and hospitals and every Medicare Advantage plan can change its benefits and costs each calendar year.  But, by law, they must remain equivalent to Original Medicare.

Medicare Advantage plans have a maximum limit on a policyholder’s annual financial risk, also called your maximum out-of-pocket expense.

Your Medicare Advantage Plan MOOP

This is an important Medicare insurance term you should be aware of as you research different Medicare choices.  That term is your annual Maximum Out-of-Pocket expense, fondly referred to as your MOOP.  Your MOOP is the most money you will be liable for in medical bills for in-patient or outpatient services during any calendar year.  It’s a great way to measure the coverage of one health insurance plan versus another.  The plan with your lowest MOOP has the most insurance coverage because your financial risk is the lowest. Once your out-of-pocket expenses have reached your MOOP you have 100% coverage for the remainder of the calendar year.  Your MOOP resets every January 01.

It’s important to know that your MOOP never includes your premium to purchase the plan and the cost of prescription drugs. Prescription drugs are always separate.

One important concept to understand when considering a Medicare Advantage Plan versus your other choices is if a private for-profit insurance company is going to provide you roughly equivalent healthcare coverage to Original Medicare but add a cap to your financial risk. Cover 100% after you reached your MOOP, what do you have to give up to receive this added benefit?

You must give up something. What you give up are the unique benefits of Original Medicare.

There are two unique benefits to Original Medicare that you give up when you enroll in a Medicare Advantage plan.

• With Original Medicare, you can see any doctor, and go to any hospital in the US or its territories.  If they accept Medicare assignment your cost will be the same. With a Medicare Advantage Plan, you are either restricted to just local doctors that accept your insurance plan and have no insurance coverage outside of those doctors, or you see doctors outside of the network but only at a higher cost and significantly higher MOOP.   
• Original Medicare intends to cover every medical procedure or service that is medically necessary, and it relies on your doctor’s opinion and diagnosis to define medical necessity.  You and your doctor control your healthcare.  With a Medicare Advantage plan the insurance company gets to define medical necessity and they do not even ask your doctor.  Every procedure must first be approved by the insurance company.