Medicare Part C: The choice of Medicare Advantage Plans
This article is the third in a series examining what Medicare does and does not cover. This segment addresses Part C, which allows the insured to choose Medicare Advantage plans instead of regular Medicare.
What are Medicare Advantage Plans?
Medicare Advantage plans provide coverage through a health plan, approved by Medicare, but run by private companies. Most provide the services and rights provided by Medicare Parts A and B. The Part B premium is paid for members in some plans; other plans pay part or none of it. Some plans have an additional monthly plan premium. Some include prescription drug coverage which substitutes for Medicare Part D.
Members may pay a deductible and will pay copayments which may differ from original Medicare and from plan to plan.
What Type Plans are Available?
A number of types exist, although which plans are available differ by geographic area.
1. Health Maintenance Organizations (HMO) and HMO Point-of-Service Medicare Advantage Plans
An Health Maintenance Organizations (HMO) acts as a liaison with providers on a prepaid basis. The doctors, hospitals and other health providers agree to treat patients in accordance with the guidelines and restrictions of the HMO.
With most HMO Medicare Advantage plans insureds are restricted to obtaining their health care services from doctors, hospitals and other care providers listed in the plan network. An exception to this rule exists for emergency care, out-of-area urgent care and out-of-area dialysis. Generally, the insured is required to name a primary care physician (PCP) who will act as a gatekeeper for services. The patient will need a referral from the PCP to obtain covered services from specialists.
However, some Medicare Advantage HMOs allow the insured to obtain health care services from out-of-network providers by paying a higher cost than for in-network provided services. These plans are called HMO with point of service (POS) options or HMOPOS plans.
2. Preferred Provider (PPO) Medicare Advantage Plans
Another type of Medicare Advantage Plan is the Preferred Provider Organization (PPO) plan provided by a private insurance company. In a PPO the insured pays less if a network provider is used. Conversely, the insured pays more if the provider is not in the network. The insured is not restricted from obtaining services out of network as he or she could be in the HMO that is not a HMOPOS plan. But the insured pays the penalty of a higher cost to do so.
3. Private Fee for Service (PFFS) Medicare Advantage Plans
The Private Fee for Services (PFFS) Medicare Advantage Plan does not pay according to original Medicare guidelines. Medicare does not pay for services under these plans. Instead, the plan itself determines how much it will pay doctors, other providers and hospitals. It also establishes how much the insured must pay when receiving care. Some PFFS plans have a network of providers who have agreed to treat plan members. Not all providers are willing to accept the payment terms of the PFFS plans.
Some PFFS plans contract with providers who agree to treat insureds under these plans even if they have not treated the patient before. However, out-of-network providers and hospitals may opt not to provide treatment under a PFFS even if they have previously treated the patient. Therefore, it becomes important to make certain one’s treating physicians will treat and accept the terms of payment under PFFS prior to signing up with a PFFS if one wants to continue treatment from that doctor.
4. Special Needs (SNP) Medicare Advantage Plans
The Special Needs Medicare Advantage Plans provide services for individuals with specific needs or characteristics. They tailor benefits, provider choices and drug formularies to best suit these particular needs. With the exceptions of emergency, urgent care, a sudden illness or injury or dialysis needed with End-Stage-Renal Disease (ESRD), care is limited to providers and hospitals within the plan network.
Only these groups qualify for SNP plans: (1) persons living in certain institutions, such as nursing homes; (2) persons who require nursing care at home; (3) persons eligible for both Medicare and Medicaid; and (4) persons who have specific chronic or disabling conditions, like diabetes, ESRD, HIV/AIDS, chronic heart failure or dementia.
Most SNPs require the insured to have a primary care doctor or a care coordinator. Most services provided by a specialist will require a referral from this primary care doctor or care coordinator. Also, those on Medicaid should determine whether the doctor or other health care providers will accept Medicaid before obtaining treatment.
Although some SNPs limit their enrollment number, one can enroll any time. There is no particular enrollment period as with original Medicare.
5. Medicare Medical Savings Account (MSA)
The Medicare Medical Savings Account plans are consumer-directed Medicare Advantage Plans. They are similar to Health Savings Account plans offered outside of Medicare. The plans contain two parts. One part provides an insurance plan with a high deductible. The insurance will not pay any of the expenses incurred until the high deductible is met. The other part provides a savings plan to pay for health care costs. The Medicare MSA deposits money into your medical savings account from which the insured can use funds, until exhausted, to pay for health care prior to meeting the deductible.
MSAs provide the advantage of flexibility in choosing providers for health care. In addition to covering the health care services that Medicare provides, some MSA plans, for an extra cost, cover additional items which original Medicare does not cover, such as dental, vision and long-term care.
Next week the final column of this series, addresses Medicare Part D, prescription drug coverage.
Sandra W. Reed is an attorney with Katten & Benson, an Elder Law firm in Fort Worth, Texas. She lives in beautiful Somervell County, near Chalk Mountain. If you have questions about this column or wish to suggest a topic of interest, Ms Reed may be contacted by phone at 254-797-0211 or by email at firstname.lastname@example.org.