Medicare Part C – Medical Advantage plans – Description of types, and your costs
Private insurance companies offer the following types of coverage through Medicare Advantage plans:
- Health Maintenance Organization (HMO) Plans
- Preferred Provider Organization (PPO) Plans
- Private Fee-for-Service (PFFS) Plans
- Special Needs Plans (SNP)
Other, less common types of Medicare Advantage Plans include:
- HMO Point-of-Service (POS) Plans — An HMO plan that may allow you to get some services out-of-network for a higher cost.
- Medical Savings Account (MSA) Plans — An MSA plan combines a high deductible health plan with a bank account.
Local HMOs and PPOs contract with provider networks to deliver Medicare benefits. Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) will cost participants the least amount of money for health care, but they are the most restrictive. For the most part, individuals are covered only when using the provider’s doctors, specialists, and hospitals.
In 2011, HMOs accounted for the majority (65%) of total Medicare Advantage enrollment. Local PPOs accounted for 18% of all Medicare Advantage enrollees.
Regional PPOs were established to provide rural beneficiaries greater access to Medicare Advantage plans, and cover entire statewide or multi-state regions. Regional PPOs accounted for 9% of all Medicare Advantage enrollees in 2011.
Private Fee-for-Service plans (PFFS) are the most flexible plans, but also the most costly. Participants are allowed to see their own Medicare-approved doctor or hospital who accepts the plan’s payment terms. They were originally authorized in 1997, but at the time they were not required to establish physician/specialist networks. However, since 2011, most have generally been required to do so. PFFS enrollment was approximately 0.6 million enrollees in 2011, which is 5% of all Medicare Advantage enrollees.
Special Needs Plans (SNPs), are usually HMOs with specific restrictions. Beneficiaries of these plans must be:
- Dually eligible for Medicare and Medicaid;
- Live in long-term care institutions (or would otherwise require an institutional level of care);
- Have certain chronic conditions.
From 2006 to 2011, the number of SNP enrollees has increased from 0.5 million to 1.3 million enrollees.
Medical Advantage Costs
According to the latest information from Medicare.org, participants’ out-of-pocket expenses depend on several different variables. These may include:
- Whether the plan charges a monthly premium in addition to your Part B premium
- Whether the plan pays any of the monthly Part B premium (some plans offer this option, usually for an additional cost)
- Whether the plan has a yearly deductible or any additional deductibles
- How much you pay for each visit or service (copayments)
- The type of health care services you need and how often you get them
- Whether you follow the plan’s rules, like using network providers
- Whether you need the additional benefits and if the plan charges for it
- The plan’s yearly limit on your out-of-pocket costs for all medical services
Sources used for this article:
http://www.medicare.gov/navigation/medicare-basics/medicare-benefits/part-c.aspx
http://www.medicare.org/medicare-basics/part-c.html#what%20is%20part%20c
http://www.kff.org/medicare/upload/2052-15.pdf
Tags: HMO, medical savings account, medicare advantage plans, part b premium, PPO, private fee for service plans, regional ppo, Seniors, Special needs plans
