Medicare Advantage Plans
Medicare Advantage plans are health plan options that are approved by Medicare and run by private insurance companies. They are part of the Medicare program and are considered Part C of Medicare.
When you join a Medicare Advantage (MA) or Medicare Advantage with Prescription Drugs (MAPD) plan, you are still in Medicare. The plan provides all of your Part A (hospital) and Part B (medical) coverage and must cover medically necessary services. They generally offer extra benefits and some may include Part D drug plan benefits (MAPD).
Medicare pays an amount of money each month to the company to provide your health care services. There are some Medicare Advantage plans with low premiums to the member. This is possible because Medicare is paying money to the company each month on your behalf. You can join the plan if:
- You live in the plan's service area
- You have Medicare Part A and Part B
- You don't have End-Stage Renal Disease (ESRD)
Medicare Advantage Plans Have a Number of Differences from the Original Medicare Plan
- You still pay your Part B premium.
- You do not use your Medicare card. You use your plan's ID card instead.
- You will usually pay a co-pay or co-insurance for services you get.
- You don't need to buy a Medigap or Medicare Supplement policy.
- There may be extra benefits like vision, dental and hearing coverage.
- Some plans have a network of doctors.
- If the plan includes a Part D drug plan benefit (MAPD), you won't need a separate Part D plan.
- There are out-of-pocket maximums for the plan.
- Possibly lower co-payments and deductibles than Original Medicare (without a Medicare supplement).
Types of Medicare Advantage Plans
There are three types of Medicare Advantage plans. Since each plan can vary, it is important you read the plan materials carefully.
HMO - Health Maintenance Organization. In most cases, these plans include the prescription drug coverage which is included in the premium. You will need to choose a primary care doctor and get a referral before you see any other health care provider. Except for emergencies, you generally must receive your care from doctors in the plan's network. If you go out of network, you may have to pay 100% of the cost. This can be the most restrictive option. If you choose this option, we recommend you make sure all your doctors participate in the HMO.
PPO - Preferred Provider Organization. Most of these plans will include prescription drug coverage and that is included in your premium. There is a network of doctors and hospitals. If you choose a doctor in the network, your cost is less than if you go out of network. There may be deductibles that apply if you go out of network. No referrals are needed to see doctors other than your primary care doctor. We recommend that you make sure all your doctors are in the plan's network to keep your costs the lowest. The network of doctors may vary if you have a local PPO verses a regional PPO.
PFFS – Private Fee For Service. this is the most flexible of all the Medicare Advantage plans. You can see any doctor or hospital as long as they agree to accept payment from the plan. Some include prescription drug coverage in the premium (in that case you do not need a separate Part D drug plan) but many do not.
PFFS plans do not require providers to join a network. There are no lists of doctors that members need to use. Providers are considered "deemed" participants of a plan if they:
- Know in advance of providing services that a Medicare beneficiary is a member of the plan. Members are told that they should show their ID card each and every time they visit a provider (doctor or hospital).
- Have a reasonable opportunity to obtain the term and conditions of the plan prior to providing services. These are provided via a website and provider services number (on the back of the member's card).
- Subsequently provide services to that member.
An Annual Medicare Plan Re-Evaluation is Recommended
You have an opportunity each year to change your Medicare Advantage plan during the annual enrollment period (October 15 to December 7). Just like with the prescription drug plan, we recommend you re-evaluate your plan yearly. The plan premiums, co-pays, and other benefits can change each year. If your plan includes drug coverage, the formulary may change or your medications may have changed. The network of doctors may change as well.
We strongly encourage you to compare plans each year. If you live in Indiana or Kentucky, we can help you compare plans. Contact us for information.
More Information: HMO, PPO and PFFS Plan Explained
A Health Maintenance Organization (HMO) is a type of managed care health plan where members choose their physician from a list of approved health care providers which typically results in lower premiums and/or copayments. Generally, members of an HMO can only see a health care specialist (obstetrician, cardiologist, rheumatologist) if they get a referral from their primary care physician, also known as a gatekeeper.
Your primary care physician serves as your health care advocate and will help you find the best treatment for physical and mental health problems you might face. HMO's tend to provide the least expensive medical coverage and a minimum amount of paperwork. However, your choice of physicians may be more limited.
The benefits of a Health Maintenance Organization (HMO) can differ depending on the company and group plan. Your HMO may cover health screenings, cancer screening, preventative care, immunizations, laboratory tests, X-rays and other scans, prescribed medications, surgical treatments, and more. Make sure you understand the specific benefits offered by your HMO policy and ask questions if you are confused or unsure about the HMO's benefits. Be sure to review the Summary of Benefits, which is the part of the HMO policy that outlines the different benefits provided.
A Preferred Provider Organization (PPO) is a managed care health plan that gives its members multiple choices in health care and health care providers. You pay a monthly premium for coverage of a broad range of medical services. Like an HMO, a PPO may charge a copayment for each office visit and there is usually no paperwork to complete. The network of physicians is often much larger than that of an HMO and members can self-refer themselves to many specialists and even physicians outside of the network, although there may be higher copayments for these services.
The PPO does not require the use of a primary care physician (PCP) or a referral to see a specialist. While the PPO is more flexible with their rules than an HMO is, members may pay higher premiums to be part of the PPO and also make higher out-of-pocket payments to their doctor at an office visit. You may be able to keep your out-of-pocket spending lower by using one of the PPO's network providers.
With a PPO, the health care providers sign a contract to provide care to the plan members at a discounted or negotiated rate. The PPO has agreements with multiple providers, including hospitals, doctors, and health care specialists. These providers make up the PPO provider network. Usually, the plan provides better benefits and lower costs for services received from network providers; covered persons are encouraged to use them. Although plan members can generally receive care from providers outside of the network, they will likely pay more for their care. If you don't want to switch doctors, a Preferred Provider Organization (PPO) may allow you the flexibility to keep your current physicians.
A PFFS (Private Fee For Service) health insurance plan allows you to select the doctor or doctors you would like to use. Payment is made based on the charges for services. While the PFFS health insurance plan is not common, it does have benefits for those who travel frequently or who use out of state health care specialists. Private Fee For Service plans usually have a cap on the amount you have to pay for medical bills in one year.