Medicare Advantage Plans - Which Plan is Right for You
There are 5 main types of Medicare Advantage Plans (aka Medicare Part C). They may or not all be available in your particular area or region so you should check with Medicare for specific, local options (see contact information at the end of this article).
This article will explain the various plans and how they work.
Health Maintenance Organization (HMO)
Preferred Provider Organization (PPO)
Private Fee‐for‐Service (PFFS)
Special Needs Plan (SNP)
Medicare Medical Savings Account (MSA)
Medicare Advantage Plans can vary so be sure to read over the individual plan rules and materials
carefully to make sure you understand everything. If in doubt, contact the plan to find out if the service
you need is covered and how much it costs.
1) Medicare Health Maintenance Organization (HMO) Plan
When you join an HMO your care and services must generally be received from doctors or hospitals that are in the plan’s network. The exceptions would be for emergencies and out‐of area urgent care or dialysis. In some cases you may be able to go out of the plan’s network for services, but at a higher out-of-pocket cost. This is referred to as a HMO with a POS option.
Prescription drugs are covered in most HMOs, although you’ll want to confirm this. If drug coverage is desired, you must join a HMO Plan that offers it (i.e., you cannot purchase a free standing Medicare Prescription Drug Plan with an HMO).
Upon joining an HMO you will typically need to choose a primary care doctor. Seeing a specialist will also require a referral from your primary care doctor. There are certain exceptions such as annual mammogram screenings. Always check with your primary care provider prior to receiving care outside of the plan network to avoid having to pay more out-of-pocket.
It’s important to always follow the plan rules, such as getting prior approval for certain services when needed.
2) Medicare Preferred Provider Organization (PPO) Plan
PPO Plans also use an approved list of network doctors and hospitals, but are a little more flexible than HMOs in that you can also use out‐of‐network providers for covered services. However, this will usually be at a higher out-of-pocket cost. You do not need to
choose a primary care doctor and will not have to get a referral in order to see a specialist.
Prescription drugs are normally covered, but you will need to check with the plan to be certain. If drug coverage is desired, you must join a PPO Plan that offers it (as with an HMO).
The two types of PPOs are Regional and Local.
A regional PPO serves one of 26 US regions set by Medicare. Larger Regional PPO networks may be appealing to beneficiaries who seek treatment in a state other than their state of residence.
This would be particularly helpful for those who spend a large portion of the year in a state other than their primary state of residence (e.g. Snowbirds).
In contrast, local PPOs just serve the counties the PPO Plan chooses to include in its service area. Local PPOs have mandatory limits on out‐of‐pocket costs that are set by Medicare.
3) Medicare Private‐Fee‐for‐Service (PFFS) Plan
PFFS Plans allow you to obtain service from any Medicare‐approved doctor, other health care provider, or hospital that accepts the plan’s payment terms and agrees to treat you. Some plans also use a network of providers who have agreed to treat plan
members and accept the plan’s terms. You may also choose out‐of‐network providers and facilities who accept the plan’s terms, but you may pay more. You do not need to choose a primary care doctor and you do not have to get a referral to see a specialist
Prescription drugs are sometimes covered. If not, you can join a separate Medicare Prescription Drug Plan (Part D) to obtain coverage.
Other things you need to know about Medicare PFFS Plans include the following:
They are not the same as Original Medicare (A & B) or Medigap plans.
The plan decides how much you must pay for services and what it pays participating providers.
Some PFFS Plans contract with a network of providers who agree to always treat you even if you’ve never seen them before.
Out‐of‐network doctors, hospitals, and other providers may decide not to treat you even if you have seen them before.
Check to make sure your doctors, hospitals, or other providers agree to treat you under the plan, and accept the plan’s payment terms.
Doctors, hospitals, and other providers must treat you in emergency situations, regardless of network affiliations.
4) Medicare Special Needs Plan (SNP)
SNPs are Medicare Advantage Plans that are designed to provide more focused care management, benefits that are tailored to enrollee conditions, and special expertise of the plan’s providers.
You generally must use the plan’s network of doctors, providers and hospitals, except for emergencies, out‐of‐area urgent care or dialysis. You will usually need to choose a primary care doctor along with a referral to see a specialist. Certain services, such as
annual mammogram screenings, do not require a referral.
All SNPs must provide Medicare Part D Prescription Drug Coverage.
Following are some other points concerning Medicare Special Needs Plans (SNPs).
Plans limit membership to people belonging to one of the following groups:
People who live in certain institutions (such as nursing homes), or who require in-home nursing care;
People who are eligible for both Medicare and Medicaid;
People who have one or more specific chronic or disabling conditions such as diabetes, congestive heart failure, a mental health condition, or HIV/AIDS.
Plans may further limit membership within these groups.
Plans should coordinate the services and providers needed to help you stay healthy.
If you have Medicare and Medicaid, your plan should make sure that all of the plan providers you use also accept Medicaid.
If you live in an institution, make sure that plan doctors or other health care providers serve people there.
5) Medical Savings Account (MSA) Plan
MSA Plans combine a high deductible health plan with a bank account. Medicare deposits money into the account and you use the money to pay for your health care services. This also includes health care costs that are not covered by Medicare. Each time that you use account money for Medicare-approved services, it counts toward your plan’s deductible.
Should you use all of the account money and still have additional health care costs, you will have to pay for them out-of-pocket until your plan’s deductible is reached. During this time doctors and other providers cannot charge you more than the Medicare-
approved amount for services.
Once your deductible is met, your plan will cover your Medicare-covered services. Read your plan for information and details about out-of-pocket costs.
Money left in your account at the end of the year stays in the account and may be used for health care costs in future years. If you use any funds from your account you must include a special form with information on how you used your account when you file
As you’ve read, Medicare Advantage Plans can vary significantly so read individual plan materials carefully to make sure you understand the plan’s rules, benefits and services. Once you decide on a plan, you will be provided detailed information which will be updated annually. You may also want to contact the plan directly to find out if the service you need is covered and how much it costs.
To help you find plans in your area contact us.
Another great resource is The Medicare & You handbook. It can be viewed or downloaded here.