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The Different Kinds of Medicare Advantage Plans Explained


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Did you know there are several different types of Medicare Advantage plans? You might have a choice of several kinds, such as:

  • HMO (Health Maintenance Organization)
  • PPO (Preferred Provider Organization)*
  • PFFS (Private Fee-for-Service)
  • SNP (Special Needs Plan)

We’ll take a look at each of these types and more, so you can compare Medicare Advantage plans while keeping your needs in mind.

Medicare Advantage: a brief summary

Let’s start with a quick overview of the Medicare Advantage (Part C) program before you compare Medicare Advantage plans.  Medicare Advantage gives you an alternative way to get your Original Medicare (Part A and Part B) benefits. Under Medicare Advantage, you receive these benefits through a private insurance company that contracts with Medicare. You’re still in the Medicare program, but now a private company administers these benefits and delivers them to you. The exception is hospice care, which is still covered directly under Part A.

Many Medicare Advantage plans go beyond Original Medicare coverage. For example, most plans include prescription drug coverage, which is limited under Part A and Part B. Some plans include routine dental coverage, SilverSneakers fitness programs, and/or other benefits.

As you compare Medicare Advantage plans, please note that you still have to pay your monthly Part B premium, along with any premium the Medicare Advantage plan might charge.

Compare Medicare Advantage plans: know the different types

To help you compare Medicare Advantage plans, here are quick descriptions of the different types. Please note that every type of plan might not be available in your area.

Health Maintenance Organization (HMO) – You might be familiar with this type of plan if you were ever covered by an employer through an HMO. Medicare Advantage HMO plans typically:

  • Have provider networks
  • Require you to go to providers within the plan’s provider network in order to be fully covered
  • Require you to choose a primary care provider
  • Require a referral if you want to see a specialist

HMOs often have lower premiums than other types of Medicare Advantage plans.

Preferred Provider Organization (PPO) – Again, some employer group plans are PPOs, so you might know something about this type of plan. Medicare Advantage PPO plans typically:

  • Have provider networks
  • Let you to go to providers outside the plan’s provider network, but might charge more for such visits
  • Don’t require you to choose a primary care provider
  • Don’t require a referral if you want to see a specialist

Health Maintenance Organization Point-of-Service (HMO-POS) –This type of plan is similar to an HMO, but may let you get care outside the plan network. Medicare Advantage HMO-POS plans typically:

  • Have provider networks
  • Let you to go to providers outside the plan’s provider network, but might charge a higher copayment or coinsurance for such visits

Private Fee-for-Service (PFFS) –This type of plan sets its own payment structure. The plan decides how much it will pay its Medicare providers, and how much you will pay as a patient. Here are some things to know about PFFS plans:

  • Some plans let you visit any health-care provider who accepts Medicare assignment and accepts the PFFS plan’s payment terms.
  • Other plans may have provider networks whose doctors have agreed to always treat plan members. Generally you can seek care outside the network, but you might pay higher costs, and you need to make sure the provider accepts the plan’s payment terms.
  • PFFS plans don’t require you to choose a primary care provider.
  • PFFS plans don’t require referrals for specialist visits.
  • You pay only the plan’s coinsurance or copayment amount at the time of service.

Special Needs Plans (SNPs) – This is a special kind of Medicare Advantage plan that’s designed to serve people with specific health conditions, or meet certain other qualifications.  SNP plans typically:

  • Require you to use providers in the plan network, except in emergencies or if you need kidney dialysis outside your plan’s service area
  • Have specialists in the specific condition that qualifies you for the SNP plan. For example, if you have chronic heart failure, your SNP would typically have cardiologists available.
  • Provide prescription drug coverage
  • Require you to select a primary care provider, or a care coordinator
  • Require referrals to specialists
  • Allow enrollment anytime you qualify, rather than during a specific enrollment period

Who’s eligible for a Medicare SNP?

First, you must be enrolled in both Medicare Part A and Part B (as with any type of Medicare Advantage plan). You must also live in the plan’s service area.

You might qualify for an SNP if any of the following applies to you.

  • You qualify for both Medicare and Medicaid.
  • You live in a nursing home or similar institution
  • You’ve been diagnosed with a severe or disabling health condition, such as: end-stage renal disease (kidney disease requiring dialysis); end-stage liver disease; dementia; chronic heart failure; cancer; or diabetes mellitus. Please note that this isn’t a complete list of conditions that may qualify you for an SNP.

Medicare Medical Savings Accounts (MSAs) – This is a special kind of Medicare Advantage plan that charges a high deductible, but sets up a bank account for you to use for your health-care costs before you pay your deductible.  SNP plans typically:

  • Let you use any doctor who accepts Medicare assignment
  • Deposit a certain amount of money every year into a bank account that’s set up for you for this purpose
  • Might include additional coverage (possibly for higher premiums), such as routine dental or vision services
  • Don’t cover prescription drugs (besides the limited coverage included in Medicare Part A and Part B)

Compare Medicare Advantage plans: choosing what type of plan you want

Now that you’ve read a quick overview of several types of Medicare Advantage plans, you might be wondering how to choose the type that may work for you. Here are some questions you might want to answer before you compare Medicare Advantage plans:

  • Do you have a doctor or specialist that you want to keep? If this is important to you, you might want to go with a plan that doesn’t have a provider network – or make sure your doctor or specialist is in the plan’s network.
  • Is saving money one of your key concerns? If so, you might want to consider a Medicare Advantage HMO plan, as they often have lower costs than other Medicare Advantage plan types. Some plans may even have premiums as low as $0, but remember to also compare other out-of-pocket costs (like deductibles and coinsurance).
  • Do you want maximum flexibility? Note that different plan types may give you flexibility in different ways. For example, some plans let you visit a specialist without a referral, and some don’t require you to choose a primary care provider. Compare Medicare Advantage plans carefully and think about the flexibility each type offers.
  • Do you have a situation that might qualify you for a Special Needs Plan? You might want to call Medicare and ask. Call 1-800-MEDICARE (1-800-633-4227 – TTY users call 1-877-486-2048). Medicare representatives are available 24 hours a day, seven days a week.

**Out-of-network/non-contracted providers are under no obligation to treat Preferred Provider Organization (PPO) plan members, except in emergency situations. For a decision about whether the plan will cover an out-of-network service, you or your provider are encouraged to ask for a pre-service organization determination before you receive the service. Please call the plan’s customer service number or see your Evidence of Coverage for more information, including the cost-sharing that applies to out-of-network services.

A Private Fee-for-Service plan is not Medicare supplement insurance. Providers who do not contract with our plan are not required to see you except in an emergency. The formulary, pharmacy network, and/or provider network may change at any time. You will receive notice when necessary.

This information is not a complete description of benefits. Contact the plan for more information. Limitations, copayments, and restrictions may apply. Benefits, premiums and/or co-payments/co-insurance may change on January 1 of each year.

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