The Different Types of Medicare Advantage Plans
Medicare Advantage Plans, also known as Medicare Part C, are an alternative to Original Medicare (Parts A and B) offered by private insurance companies approved by Medicare. Medicare Advantage Plans offer or combine Part A, Medicare Part B, and often plan may offer Part D prescription drug coverage . They may also offer additional benefits that Original Medicare doesn’t cover, such as vision, dental, hearing, and wellness programs.
There are a few different types of Medicare Advantage Plans to choose from, each with their own unique features, costs, and provider networks. Understanding the different types of Medicare Plans can help you find the best Medicare Advantage Plan for your healthcare needs and budget in 2022.
Different Types of Medicare Advantage Plans
Original Medicare vs Medicare Advantage
Before diving into the types of Medicare Advantage Plans, it helps to understand the key differences between Original Medicare coverage and Medicare Advantage.
With Original Medicare, you can visit any doctor or hospital in the U.S. that accepts Medicare. Medicare pays its share of the costs for Part A and Part B covered services, and you pay the rest through deductibles, coinsurance, and copays. Many people pair Original Medicare which include prescription drug coverage that’s separate and a Medigap (Medicare Supplement) Plan provide or help to help cover costs Original Medicare does not.
Medicare Advantage Plans are an alternative way to get Medicare benefits. Private insurers approved by Medicare provide Medicare Part A and Part B coverage, sometimes bundled with Part D prescription drug plans. Medicare Plans are available that pays these private plans to cover your benefits. This can provide more convenience by combining multiple types of coverage in one plan. Advantage Plans have provider networks, so you may need to see doctors and hospitals within that network.
Now let’s look at the main types of Medicare Advantage Plans available.
Health Maintenance Organization (HMO)
Health Maintenance Organization (HMO) plans have provider networks, and you typically need to get care from doctors or hospitals in the plan’s network except in emergencies. HMOs require you to choose a primary care physician (PCP) who coordinates your care and refers you to specialists when needed.
Out-of-network care is generally not covered except in urgent or emergency situations. HMOs often have lower premiums than other Medicare Advantage Plans but may require referrals to see specialists.
Preferred Provider Organization (PPO)
Preferred Provider Organization (PPO) plans also have provider networks but allow more flexibility. You can still get care from out-of-network providers, although you’ll pay higher costs if you do so. PPOs do not require you to have a primary care physician or get referrals to see specialists.
PPOs have higher premiums than HMOs but provide more provider choice flexibility. They are a good option if you want the ability to see providers outside the plan’s network for a higher cost.
Private Fee-for-Service (PFFS) Plans
Private Fee-for-Service (PFFS) plans allow you to visit any Medicare-approved provider who accepts the plan’s payment terms and conditions. Not all providers have to agree to these terms, so be sure to check if the providers you want to use participate with a PFFS plan.
Unlike other Medicare Advantage Plans, PFFS plans do not have provider networks. These plans have flexibility like Original Medicare in that you can see any Medicare provider throughout the U.S. who agrees to treat you. But provider choice can change year-to-year as providers decide whether to accept the terms.
Special Needs Plans (SNPs)
Special Needs Plans include or (provide focused care for specific groups of people like those who have both Medicare and Medicaid, live in a nursing home, or have certain chronic conditions. SNPs tailor their benefits, provider networks, and drug formularies to best meet the needs of the particular group they serve.
There are three types of SNPs:
- Dual Eligible SNPs (D-SNPs) – For those with both Medicare and Medicaid
- Institutional Care SNPs (I-SNPs) – For people living in institutions like nursing homes
- Chronic condition SNPs (C-SNPs) – For people with specific severe or disabling chronic conditions
SNPs provide customized care coordination targeted to the needs of their members. They may also offer additional supplemental benefits beyond what other Medicare Advantage Plans may cover.
Medicare Medical Savings Account Plans
Medicare Medical Savings Account (MSA) plans combine a high deductible health plan with a bank account. The plan deposits money into the account to help you pay healthcare expenses up to the deductible. Any unused funds in your account at the end of the year remain available for future healthcare costs.
MSA plans have lower premiums but a high deductible you need to meet before coverage kicks in. The plan deposits some money into your account, but you’re responsible for contributing to cover the deductible. These plans are less common than other Medicare Advantage options.
Important Factors When Comparing Plans
When shopping for a Medicare Advantage Plan, here are some key factors to compare between plan options:
- Premium: How much does the plan charge monthly? Are there penalties if you drop coverage?
- Deductibles and out-of-pocket limits: What costs will you pay annually before coverage kicks in? Are there caps limiting your total costs?
- Copays and coinsurance: What are the copays to see your PCP and specialists? What coinsurance percentage do you pay for services?
- Covered services: Does the plan cover dental, vision, hearing, prescription drugs? Are there wellness program benefits?
- Provider network: Do your preferred doctors participate in the plan’s network? Are they accepting new patients?
- Prescription drug coverage: Do premiums, copays, coinsurance, and covered drugs meet your medication needs?
- Quality ratings: How is the plan rated on quality of care and customer satisfaction?
Enrolling in a Medicare Advantage Plan
There are specific times when you can enroll in or change Medicare Advantage Plans:
- Initial Enrollment Period: According to centers for Medicare, when you first become eligible for Medicare at age 65, you can enroll in Medicare Advantage during your 7-month Initial Enrollment Period.
- Annual Enrollment Period: From October 15–December 7 each year, you can enroll in or switch Medicare Advantage Plans for coverage starting January 1.
- Medicare Advantage Open Enrollment Period: From January 1–March 31, Medicare Advantage members can switch to a different Medicare Advantage Plan or disenroll and return to Original Medicare (and add a Part D Plan).
Medicare Advantage Plans are optional — you can stick with Original Medicare if you prefer. But Medicare Advantage can provide more convenience and coordinated care. Understanding the plan options available can help you determine if Medicare Advantage is right for your needs.
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What are the different types of Medicare Advantage Plans available?
There are several main types of Medicare Advantage Plans including HMO plans, PPO plans, PFP plans, and special needs plans (SNPs) like Dual Special Needs Plans. MA plans (like HMOs) may require choosing a primary care doctor and getting referrals while others (like PPOs) offer more flexibility but for a higher premium. MSA plans also exist but are rarely offered. Beneficiaries should understand the key differences when comparing Medicare Advantage Plan options.
How do Medicare Advantage Plans provide prescription drug coverage?
A: Most Medicare Advantage Plans like HMOs, PPOs, and private fee-for-service plans provide prescription drug coverage, which is especially valuable because traditional Medicare on its own does not cover prescription drugs except in limited situations. This means that individuals enrolled in a Medicare Advantage Plan that includes drug coverage will not need a separate Medicare Part D prescription drug plan.
What are the benefits of choosing a Medicare Advantage Plan over Original Medicare?
A: In addition to including prescription drug coverage, many Medicare Advantage Plans also offer reduced out-of-pocket costs compared to Original Medicare because they often have lower premiums and cost sharing for medical services. They also frequently provide extra benefits like dental, vision and fitness that traditional Medicare alone does not cover. Another advantage is that Medicare Advantage Plans require fewer Supplement Plans like Medigap to fill coverage gaps.
When is the annual enrollment period for Medicare Advantage Plans?
Medicare holds an annual enrollment period each year from October 15th through December 7th when all people with Medicare can join, switch or drop their Medicare Advantage and prescription drug plans. This gives beneficiaries the opportunity to compare the plan options in their area for the following year and choose the coverage that best meets their needs and budget. Enrollment changes made during this period will be effective on January 1st of the coming year.
How do Medicare Advantage Plans provide Alzheimer’s disease and dementia coverage?
Some Medicare Advantage Plans specialize in caring for beneficiaries with specific chronic conditions. These are known as Special Needs Plans or SNPs. One type is Dual Eligible Special Needs Plans that cover costs for people eligible for both Medicare and Medicaid and often those with Alzheimer’s disease or dementia. These plans must be approved by Medicare and provide targeted care management to support the serious health issues of beneficiaries living with Alzheimer’s/dementia.
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