What are Medicare Advantage Plans?
In 1997 the Balanced Budget Act of 1997 expanded private plan options through the newly-established “Medicare+Choice” program. As part of the expansion, local Preferred Provider Organization (also known as “PPO”), Private-fee-for-Service (also known as “PFFS”) and Medical Savings Account (also known as “MSA”) plans were authorized. This was a significant change for Medicare beneficiaries because before the Balanced Budget Act of 1997 the only option in additional to original Medicare Parts A and B with regard to private insurance plans was a Health Maintenance Organization (also known as “HMO”) plan.
The Medicare Modernization Act of 2003 revitalized the role of private health insurance plans in the Medicare program by renaming the program “Medicare Advantage” and by authorizing additional plan types to be offered to Medicare beneficiaries. The new plans authorized by the Medicare Modernization Act included regional PPO plans and Special Needs Plans (also known as “SNPs”).
A Medicare Advantage Plan is not a Medicare Supplement (Medigap), it is another way to get your Medicare coverage. If you join a Medicare Advantage Plan, you still have Medicare. You’ll get your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage from the Medicare Advantage Plan, not Original Medicare. Medicare Advantage Plans, sometimes called "Part C" or "MA Plans," are offered by private companies that Medicare approves.
Medicare Advantage Plans cover all Medicare services
In all types of Medicare Advantage Plans, you’re always covered for emergency and urgent care. Medicare Advantage Plans must cover all of the services that Original Medicare covers except hospice care and some care in qualifying clinical research studies. Original Medicare covers hospice care and some costs for clinical research studies, even if you’re in a Medicare Advantage Plan.
Medicare Advantage Plans may offer extra coverage, like vision, hearing, dental, and other health and wellness programs. Most include Medicare prescription drug coverage (Part D). In addition to your Part B premium, you might pay a monthly premium for the Medicare Advantage Plan.
Medicare Advantage Plans must follow Medicare’s rules
Medicare pays a fixed amount for your coverage each month to the companies offering Medicare Advantage Plans. These companies must follow rules set by Medicare. However, each Medicare Advantage Plan can charge different out-of-pocket costs and have different rules for how you get services (like whether you need a referral to see a specialist or if you have to go to doctors, facilities, or suppliers that belong to the plan’s network for non-emergency or non-urgent care). These rules can change each year. The plan must notify you about any changes before the start of the next enrollment year.
What are the different types of Medicare Advantage Plans?
- Health Maintenance Organization (HMO) plans—In most HMOs, you can only go to doctors, other health care providers, or hospitals in the plan’s network except in an urgent or emergency situation. You may also need to get a referral from your primary care doctor for tests or to see other doctors or specialists.
- Preferred Provider Organization (PPO) plans—In a PPO, you pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. You usually pay more if you use doctors, hospitals, and providers outside of the network.
- Private Fee-for-Service (PFFS) plans—PFFS plans are similar to Original Medicare in that you can generally go to any doctor, other health care provider, or hospital as long as they agree to treat you. The plan determines how much it will pay doctors, other health care providers, and hospitals, and how much you must pay when you get care.
- Special Needs Plans (SNPs)—SNPs provide focused and specialized health care for specific groups of people, like those who have both Medicare and Medicaid, live in a nursing home, or have certain chronic medical conditions.
- HMO Point-of-Service (HMOPOS) plans—These are HMO plans that may allow you to get some services out-of-network for a higher copayment or coinsurance.
- Medical Savings Account (MSA) plans—These plans combine a high-deductible health plan with a bank account. Medicare deposits money into the account (usually less than the deductible). You can use the money to pay for your health care services during the year. MSA plans don’t offer Medicare drug coverage. If you want drug coverage, you have to join a Medicare Prescription Drug Plan. For more information about MSAs, visit Medicare.gov/publications to view the booklet "Your Guide to Medicare Medical Savings Account Plans." You can also call 1-800-MEDICARE (1-800-633-4227) to find out if a copy can be mailed to you. TTY users should call 1-877-486-2048.
Who can join?
You must meet these conditions to join a Medicare Advantage Plan:
- You have Part A and Part B (you must continue paying your Medicare Part B premium).
- You live in the plan’s service area.
- You don’t have End-Stage Renal Disease (ESRD), there are exceptions.
If you have specific questions about Medicare, Contact Us or visit www.medicare.gov to find the answers you need. You also can call 1-800-MEDICARE (1-800-633-4227), TTY users should call 1-877-486-2048.
Source for information - Medicare &You (Revised December 2014)