What are Medicare Advantage plans?
They are a “replacement policy” for traditional Medicare. Traditional Medicare is a administered by Medicare. A Medicare Advantage plan is provided by and administered by a private company approved by Medicare.
This article generally explains the different types of Medicare Advantage plans. These include HMO’s, PPO’s and PFFS.
Medicare Advantage Plans – The Advantage
As with any insurance plan, traditional Medicare is no different. There are exclusions for services, drugs and medical supplies. There are also deductibles and co-pays which you must pay.
For Medicare Part A, you have an annual deductible of $1100. For part B, it is $155. Also, you have to pay co-pay of 20 percent. This means you will pay 20% of the cost of every medical appointment and medical service you use.
Many Medicare Advantage plans offer more coverage than traditional Medicare. At the least, you get the same insurance coverage of traditional Medicare. The Advantage plan can fill in the gaps of Medicare, similar to Medigap Insurance. It is also possible for the plans to add services for things like vision and hearing.
Traditional Medicare is a fee for service plan. With Medicare Advantage, you have a choice of coverage options. You can choose from different types of plans. These include Medicare HMO’s, Medicare Preferred Provider Organizations or PPO’s, Provider Sponsored Organizations (PSO), Private Fee for Service Plans (PFFS). Another choice is a Medical Savings Accounts (MSA) coupled with a high deductible insurance plan.
Each plan is unique. You can check out the details of different plans from sponsors on this site. Or, use the Personal Medical Plan Finder on the government site.
Medicare Health Maintenance Organizations
A HMO is a network of doctors, hospitals and other medical providers. When you join a HMO, you can only use the providers in the network. Your health care is co-ordinate by your primary care doctor (PCP). The PCP decides on your treatment. They decide if you need to see a specialist and which specialist to see. The HMO will not pay for unauthorized visits to specialists (neither will Medicare). Also, they will not pay for visits to medical providers who are not in the HMO. Some Medicare Health Maintenance Organizations do allow you choose your own doctors. If the doctors are outside of the plan, you will pay more.
The advantage of a HMO is that most plans offer more benefits than traditional Medicare. This is usually in the form of better coverage for out-of-pocket cost. You pay a small preset fee ($5 to $25) for medical visits. Plus, there are no deductibles to meet.
Medicare Preferred Provider Organizations
A Medicare PPO is similar to a HMO, but offer more flexibility. You receive a higher reimbursement when you see in-network doctors and hospitals. You can still use out of network medical services, but the reimbursement will be less. Also, you do not need to see a primary care physician to get permission to go to a specialist. The price for this increased flexibility is higher premiums.
Provider Sponsored Organizations
PSO’s are like a HMO. The medical providers are the owners in this case. This group can include doctors, laboratories and hospitals. PSO’s are new to Medicare. They have different rules that change state by state.
Private Fee for Service
PFFS are similar to traditional Medicare. You pay the first premium along with deductibles and co-payments. The advantage over Medicare is that these plans cover more services than Medicare.
Medicare Advantage Plan Availability is State Dependent
Companies that offer Medicare Advantage plans, bid to work in your state. The plans that are available to you depend on which companies decide to do business in your state. Presently, all states have at least one Medicare Advantage Plan.