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Get the Best Medicare Advantage Plan

This step-by-step guide will help you compare options from private insurers to find the best coverage for your needs.

Thanks for your step-by-step guide to picking a Medicare Part D prescription-drug plan. I would like to look for a Medicare Advantage plan during open-enrollment season this year instead of a Part D plan. What resources can help me compare Advantage plans?

Comparing Medicare Advantage plans is more complicated than shopping for Part D coverage because Medicare Advantage covers health-care as well as prescription-drug expenses. You can compare the overall costs -- premiums, co-payments and deductibles -- for the types of doctor’s visits, drugs and other medical care you typically receive. But you also have to look carefully at how the plan covers the more expensive care that you may need if you have an accident or become sick. And because Medicare Advantage plans often have more rules about which doctors and hospitals are covered, what preauthorization you need before getting certain types of care, and what procedures are excluded, it’s essential to study the coverage details and customer-service ratings before picking a plan.

A bit of background: People 65 and older can choose to get health coverage either through a Medicare Advantage plan, which provides all benefits from a private insurer, or through Medicare, with a medigap policy to help cover deductibles and co-payments plus a separate Part D policy to cover prescription drugs. See Choose the Right Medicare Plan for Your Needs for more information about which type of plan is best for you.

You have from November 15 to December 31 to sign up for your 2010 Medicare Advantage plan (the same time frame for Part D open enrollment), and you can also change your Medicare Advantage plan once from January 1 to March 31.

There are three types of Medicare Advantage plans. Medicare HMOs have the lowest premiums but the most restrictions on which hospitals and doctors are covered, and HMOs generally will not pay for out-of-network care. Co-payments may be very low if you stay within the network. Regional preferred-provider organizations (PPOs) will charge a low co-payment if you stay within the provider network, which may span several states, but a higher co-payment for out-of-network care. Premiums tend to be higher than those charged by HMOs. And private fee-for-service plans usually charge the highest premiums, but they let you use any doctor or hospital that agrees to the plan’s terms.

Medicare.gov has a great tool to help you compare costs and coverage in your area for all three types of Medicare Advantage plans. Go to Medicare Options Compare and click on “Find & Compare Health Plans” to search for Medicare Advantage plans. You can do either a personalized plan search, based on your current enrollment information, or a general plan search. For the general plan search, type in your zip code and select your age range and health status (from excellent to poor). Then answer a few questions about what type of coverage you have now and whether you qualify for any low-income subsidies.

After clicking through a page with general information about open enrollment, you’ll be able to enter the names of your medications and can click on a box labeled “use lower-cost generic drugs when available” (which will lower your costs significantly). Then enter your dosages and refill frequency. You can set up a password to access the information later, or you can skip that step. You can then choose specific pharmacies in your area or keep the results more general.

Using the information you provide, the site compiles a grid listing the plans available in your area, the monthly premiums and the estimated annual cost for people like you (based on your health and your medications). You can sort by premium, estimated annual cost, or whether the plan covers drugs, provides doctor choice, or offers vision and dental services. Start by comparing the estimated annual cost, which includes the premiums plus estimated out-of-pocket costs for people with your health status.

Then you can select up to three plans to compare their health coverage and drug benefits in detail. The drug-benefits page will show the total costs based on the medications you entered.

It’s particularly important to click on the tab that lets you compare health-benefit details. You’ll see the plans’ star ratings in several quality categories, including preventive coverage, managing chronic conditions, health-plan responsiveness and care, member complaints, appeals, drug-plan customer service, and a few other categories. Look closely at these ratings because you’re counting on this policy to provide all of your medical coverage.

Next, you’ll see the premiums, followed by details about co-payments for several types of expenses within inpatient hospital care, outpatient care, outpatient medical services and supplies (such as X-rays), and prescription-drug coverage. You may find huge differences from plan to plan, especially considering that HMOs, PPOs and private fee-for-service plans are all included on the list. For example, one HMO available in St. Petersburg, Fla., charges a $100 co-payment for the first seven days in a hospital; another has a $275 co-payment for the first five days.

Before you make a final decision, make sure that the doctors and hospitals that you use are covered, and find out about any rules that require preauthorization before your treatment will be covered.

Another way to compare Medicare Advantage plans is by looking up the annual Cost Share Report from HealthMetrix Research. The report ranks the plans based on out-of-pocket costs for three types of health status -- good, fair and poor. Rankings are based on premiums, deductibles and co-payments for common health-plan benefits that people with a given health status use. The costs include physician office visits, emergency care, hospital care, prevention care and prescriptions. HealthMetrix also selects the top plan in 95 cities for the 2010 Senior Choice Gold Awards for excellence in Medicare Benefits Value.

Got a Question? E-mail Kim at askkim@kiplinger.com.

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