How to choose a Medicare Advantage plan

Medicare Advantage plans are private plans that you can choose in place of original Medicare. They now cover about one in four Medicare recipients. Medicare's open enrollment period for 2012 runs from Oct. 15 to Dec. 7, 2011. During this period, you can switch from original Medicare to a Medicare Advantage plan (or vice versa), or from one Medicare Advantage plan to another.

Get impartial information

Your mailbox may be overflowing with sales brochures from Medicare Advantage plans, but our advice is to ignore them. Instead, use the government's Medicare plan finder and our rankings of Medicare HMO and PPO plans, which come from the nonprofit National Committee for Quality Assurance (NCQA), the main U.S. group that sets measurement standards for health insurance, accredits plans, measures the quality of care they achieve, and publicly reports its findings.

We also recommend checking out MedicareRights.org. That site has an excellent tool that will walk you through a comparison of original Medicare and Medicare Advantage.

Choose carefully

Before you choose a plan, make sure you understand these key points.

• Understand the difference between a PPO and an HMO.  In general, in an HMO it is very difficult to get care out of network. In a PPO, it's allowed but you will have to pay more of the cost yourself.
• Find out which doctors and hospitals are in the plan's provider network. Ask your doctors which Medicare Advantage plans they take part in, and which they would recommend.
• If you regularly take prescription drugs, check the Medicare plan finder to see whether they are on the plan's formulary, its list of preferred drugs. But before you sign up, double-check with the plans themselves to be sure.
• Look at all expenses you'll be paying, not just premiums. Deductibles, co-insurance, co-payments, and out-of-pocket maximums can vary greatly from plan to plan. Because you're not allowed to purchase a Medigap supplement plan alongside Medicare Advantage, you'll be responsible for paying those expenses out of your own pocket.
• If you have retiree coverage from an employer, do not sign up for a Medicare Advantage plan without checking first with your plan administrator. In some cases, it could void your retiree coverage.
• Find out what coverage you will have outside the plan's service area. Many HMOs and PPOs will only pay for emergency care when you are away from home. That is an especially important consideration if you, for example, spend the winters or summers in different locations, or pay extended visits to your adult children.