Some people need extra coverage beyond their normal health insurance benefits. These are often referred to as replacement plans. So, what are replacement insurance plans?
Those who qualify for Medicare health insurance have a few different options. They can purchase a secondary insurance plan, often referred to in this case as ‘Medigap’. These plans cover some of the expenses that Medicare does not.
Another option is a replacement insurance plan. Medicare replacement plans are just that- replacement plans for standard Medicare health insurance. A person can purchase a replacement plan through a private insurance company, such as Blue Cross Blue Shield. These plans typically cover everything that traditional Medicare would, but also covers additional services as well.
These replacement plans, called ‘Medicare Advantage Plans’, are similar to private health insurance plans in both cost and coverage. Advantage Plans can have deductibles, coinsurances, and copayments, depending on the service. Some plans offer out-of-network benefits. Some only cover healthcare providers that are in their network.
These plans were created to lower costs and improve the quality of care. They also give patients more choices. Unfortunately, changes over the years have strayed from those original goals. Many replacement plans can actually cost more than traditional Medicare alone would. This is usually through high premiums and out-of-pocket costs. Advantage plans also have their own provider networks. They may restrict the doctors you are able to see.
- For example, Dwayne is enrolled with Medicare for his health insurance. He decides to purchase a Medicare replacement plan through Blue Cross Blue Shield.
- He pays less for his Blue Cross Blue Shield Medicare Advantage plan than he would for Medicare as his primary insurance and Blue Cross as his secondary insurance combined. But now he is limited to seeing doctors in his replacement plan’s network.
- The family doctor he has been seeing for over 20 years is not in-network with his replacement plan. This leaves Dwayne to find a different doctor.
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