Types of Medicare Advantage Plans

 

Medicare Advantage plans often offer extra benefits not covered by Medicare, (such as eye exams and eyeglasses, or regular physical exams).  They are permitted to charge additional premiums for these extra services. They generally require enrollees to obtain care through a network of providers and often offer smaller cost-sharing obligations for Medicare-covered services than in Traditional Medicare (for example a small co-payment for a doctor visit rather than the 80/20 percent split of Traditional Part B). Beginning in 2006, Medicare Advantage plan sponsors must offer at least one plan option with Medicare prescription drug benefits. 

There are five general types of Medicare Advantage plans.

1. Local Coordinated Care Plans: The most common types of coordinated care plans are health maintenance organizations (HMOs), and preferred provider organizations, (PPOs). Generally, in an HMO, an enrollee must obtain all services through the network of providers and some services might require prior authorization from the enrollee's primary care physician (PCP) or directly from the plan. In an HMO, if an enrollee goes "out-of-network" to obtain care, there would be no Medicare coverage, unless the care sought was due to an emergency or was to obtain urgently needed care. Some HMOs offer a "point-of-service" option, meaning that for higher cost-sharing, out-of-network care is permitted. PPOs generally permit out-of-network care, but charge higher co-payments when enrollees go out-of-network for care.

2. Regional Preferred Provider Organizations: This new option will be available in 2006. There are 26 Medicare Advantage regions and all regional PPOs will offer Part D prescription drug coverage. They will have a combined Part A and B deductible and will have a limit on out-of-pocket cost sharing for covered services. 

3. Private Fee-for-Service Plans, (PFFS): Private fee-for-service plans cover all Medicare-covered care, but the plan, rather than Medicare, decides how much providers will be paid by the plans and how much the enrollee will pay. If the enrollee goes to a provider that accepts the PFFS plan's payment terms, the care is covered. In a private fee-for-service plan, beneficiaries might have to pay up to 15 percent more than the Traditional Medicare approved amount to a plan provider. 

4. Medical Savings Accounts:  Medical savings account plans combine a special savings account into which Medicare deposits an amount of money each year with a high deductible Medicare Advantage plan. The deductible amount may, or may not, be fully covered by the amount Medicare deposits into the savings account. 

5. Special Needs Medicare Advantage Plans: These Medicare Advantage plans generally are coordinated care plans. They may substantially limit enrollment to three Medicare beneficiary populations: (a) institutionalized beneficiaries, (b) beneficiaries who are dually-entitled to Medicare and Medicaid, and (c) beneficiaries diagnosed with certain chronic and disabling disease conditions. These plans may choose to allow End-Stage Renal Disease patients to enroll.