Medicare Advantage

Medicare Advantage (or also known as Medicare Part C) is a type of Medicare health insurance plan offered by private health insurance companies.

Medicare Advantage (or also known as Medicare Part C) is a type of Medicare health insurance plan offered by private health insurance companies. These plans offer benefits ranging from gym membership, over the counter (OTC) allowance, dental, hearing, vision, and transportation to doctor visits. Most plans do not have a monthly premium and usually include Prescription Drug coverage.

Types of Medicare Advantage

Medicare Advantage HMO

Medicare Advantage HMO is the most popular among Medicare Advantage plans. HMO stands for Health Maintenance Organizations which are commonly referred to as “managed care”. Every HMO has a network of doctors that provide services to the HMO members and the members must receive the care through that network that is contracted with the health plan.

When you enroll in a Medicare Advantage HMO plan, you must choose a Primary Care Physician (PCP) which is your family doctor or internist within the HMO network. This PCP will coordinate care and if you need non-emergency treatment from a specialist doctor, your PCP must submit a referral for you before you see the specialist.

PROS:

  • Advantage Plans are very affordable
  • Most include prescription drug coverage (Medicare Part D) at no additional monthly premium.
  • Lowest copayments compared to Medicare Advantage PPO or PFFS.
  • Additional benefits beyond what Original Medicare covers.
  • Most plans offer extra benefits.
  • PCP serves as your gateway to your care and has access to your updated consolidated prescription drugs to avoid issues like over prescription of medications among specialists.

CONS:

  • Subject to referrals and approvals. A referral is needed from your PCP to see a specialist.
  • The doctors in the network and most in-network care are limited to service areas, except for emergency, urgent care, or kidney dialysis.
  • There is no non-emergency coverage outside the network, you will pay the full cost.

Medicare Advantage PPO

Medicare Advantage PPO (Preferred Provider Organization) can give the members more freedom and flexibility than an HMO but they usually cost more. PPOs gives the members access to a wider network of providers and eliminates the need of a designated PCP and referral process to specialists that Medicare Advantage HMO plans require. If you see a provider in the plan’s network, your copays or coinsurance will be at the “in-network” rate. Most PPOs allow you to see a provider outside the network, however the “out-of-network” copays or coinsurance and out of pocket costs are usually higher.

PROS:

  • Lower monthly premiums than Medicare Supplement/Medigap plans.
  • Additional benefits beyond what Original Medicare covers.
  • Larger network and options to see out-of-network providers for higher rates & out of pocket.
  • Most include prescription drug coverage (Medicare Part D) at no additional monthly premium.
  • Maximum Out of Pocket (MOOP) to keep your cost at bay every year.
  • Not subject to referrals, no designated PCP needed.

CONS:

  • Higher monthly premiums, deductibles, copays, coinsurance, and maximum out-of-pocket than Medicare Advantage HMO plans.
  • Still subject to the plan’s network.

Medicare Advantage PFFS

In a Private Fee for Service Plan (PFFS), the insurance carrier decides what it will pay for a service of procedure and what your responsibility will be. Your costs may include annual deductibles, coinsurance (a percentage of the fee), or a flat copayment.

Unlike the Medicare Advantage HMOs, you do not need a referral from your PCP to see a specialist; you can see any Medicare-approved provider who accepts your insurance plan’s payment rates and agrees to treat you. You need to do your diligence to determine ahead of time with the provider if she/he will accept the rate that your PFFS plan pays. Otherwise if the doctor doesn’t accept the plan’s term, those services may not be covered. With the PFFS, in addition to the Medicare Part B monthly premium, you will pay an additional monthly premium.

PROS:

  • Lower monthly premium than most Medicare Supplement (Medigap) plans.
  • Some plans include prescription drug coverage (Medicare Part D) at no additional monthly premium.
  • Not subject to referrals, no designated PCP needed.
  • Maximum Out of Pocket (MOOP) to keep your cost at bay every year.
  • Larger network than HMOs.

CONS:

  • Higher monthly premiums, deductibles, copays, coinsurance, and maximum out-of-pocket than Medicare Advantage HMO and PPO plans.
  • The amount of legwork that you need to do to make sure the provider accepts the plan’s rate or not.
  • May allow “balance billing” in which the provider is permitted to charge you an extra 15% over and above the plan’s payment rate.

Frequently Asked Questions

What are the major differences between PPOs and Medicare Supplement (Medigap)?

  • Medicare Advantage PPO comes with a limited network of providers. You will still have an option to see out-of-network providers, however you will pay higher coinsurance. Medicare Supplement (Medigap) has no network; it gives you freedom to choose any provider in the US that accepts Medicare assignment.
  • Unlike Medicare Advantage PPO, most Medicare Supplement plans don’t have copayments or coinsurance. However the Medicare Supplement monthly premium is generally higher than Medicare Advantage PPO.
  • Most Medicare Advantage PPO plans do include Medicare Part D (Prescription Drug), while Medicare Supplement plans don’t.

How would the Medicare Advantage plans be different from Original Medicare?

  • With Original Medicare, your benefits are administered by the federal government, unlike Medicare Advantage where the benefits are managed through a private insurance company. Medicare pays the Medicare Advantage carrier to administer your benefits.
  • Original Medicare has no network limitations. Medicare Advantage has limited doctor networks and when you need to see a specialist with a small network, access to care can be more challenging.
  • Most Medicare Advantage plans offer benefits beyond what Original Medicare covers like gym membership, over the counter (OTC) allowance, dental, hearing, vision, and transportation to doctor visits.

What are the differences between HMOs and PPOs?

With a PPO, it is not required to have a designated primary care physician (PCP) and you can see a specialist without a referral from your PCP. With HMO you have to see the providers who are in the network only, unless in a medical emergency; while with PPO gives you an option to see out-of-network providers (for a higher rate)

What’s the requirement to enroll in a Medicare Advantage plan (Part C)?

You must have both Medicare Part A and Part B and live in the service area in order to enroll in a Medicare Advantage plan.

Is Medicare Advantage plan (Part C) the same as a Medigap/Medicare Supplement plan?

No, they are not the same. You leave Original Medicare when you sign up for Part C, while Medigap/Medicare Supplement plans work with Original Medicare to provide you more comprehensive benefits than Original Medicare has to offer.

Do I need to enroll in a Medicare Advantage plan (Part C)?

You don’t need to. It’s your choice to decide if you’d like to be on Original Medicare or sign up for Medicare Advantage Plan (Part C) or Medicare Supplement (Medigap). Be mindful of the deductibles and copayments if you choose to stay on Original Medicare with no additional medicare insurance coverage. As well as the late enrollment penalty if you don’t have creditable prescription drug coverage.

The Medicare Advantage plan that I am thinking of signing up doesn’t have a monthly premium. How is it funded?

The Medicare Advantage plan receives funding from the government as it agreed to pay your medical claims. In other words, your claim is the responsibility of the Part C insurance carrier.

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