The Advantage of Medicare Advantage Plans
Medicare Advantage Plans fall under the larger heading of private Medicare health plans. These are plans offered by a private insurance company contracting with Medicare to provide the benefits in Part A and Part B, as well is often providing additional benefits not found in standard Medicare coverage.
There are four main types of Medicare Advantage Plans. Next we will address each of these different types of plans in turn, laying out some advantages and disadvantages of each.
Health Maintenance Organization (HMO) Plans
The main disadvantage of an HMO plan is that you can't go just any doctor or healthcare provider for your medical care; instead, you need to get your service and care from doctors or hospitals in your particular plan's network.
In some emergency situations, the plan may allow you to go to the nearest hospital to get the emergency care you need. Otherwise, going outside the plan to a non-plan provider means the plan will not cover medical services from that provider. Some types of HMO plans do allow you to go out-of-network for certain services, but in those situations you will be required to pay a higher percentage of the cost than you would otherwise.
Some plans require you to get permission from the plan administrators when you need to get certain procedures done. Failure to get permission or to notify your plan before the procedure might result in the plan refusing to pay after the fact.
What, then, are the advantages of an HMO plan? simply put, when you remain in the network for an HMO plan, there are substantial cost savings and additional coverage is available above typical Medicare coverage.
For instance, most HMO plans cover prescription drugs, which is not included by default in the Medicare system. Additionally, the HMO plan may assist you in paying even the remaining deductible or premium under Medicare Part A or Part B.
Preferred Provider Organization (PPO) Plans
The main difference between an HMO plan and a PPO plan is that, while if you go outside of the plan's network in an HMO plan you might have to pay the full cost of the medical procedure or service, in a PPO plan you only have to pay more if you use doctors, hospitals, or providers outside of the network.
A situation where a PPO may be preferable to an HMO is where the person needing the coverage might need extensive medical treatment in a variety of different specialties.
While in HMO may lack sufficient physicians in the network, even if the PPO does not have those physicians of the network, there is only a small additional cost to pay, rather than paying the full cost of the medical service.
Similarly to HMO plans, PPO plans typically offer prescription drug coverage in addition to extra benefits above and beyond those available under traditional Medicare. Each PPO plan, however, is different, and it is important to check to make sure that the PPO you are looking at has the extra benefits and physicians in the network that you need.
Private Fee-for-Service (PFFS) Plans
The PPFS plan is a very interesting and very different type of plan than an HMO or PPO. as its name suggests, the plan sets up a fee schedule that it determines ahead of time with doctors, other healthcare providers, and hospitals. This fee schedule clearly delineates which costs the plan will cover, and which costs you will have to cover. Like HMOs and PPOs, the PPFS plans often cover prescription drugs, in addition to benefits that are not covered under a traditional Medicare system.
Obviously, the most important thing to look at when choosing a PPFS plan is the total costs that you will be expected to pay, the types of services and procedures covered by the fee schedule, and Medicare Advantage Plans
Sometimes, a plan may have a special arrangement in place where doctors or physicians within a network will always agree to treat you if you are in the plan; while other doctors may still treat you, it is always good to choose a plan that includes local physicians in your area into the network to ensure that there is always a physician you can see.
Special Needs Plans (SNPs)
The final plan type of the four main Medicare Advantage Plans is the Special Needs Plan or SNP. SNP plans function very similarly to HMO or PPO plans, with the fundamental distinction that they typically limit membership in the plan to people with specific diseases or characteristics.
The advantage of limiting membership to people with these particular conditions is that a Medicare SNP is then able to carefully design the benefits, covered providers, and prescription drug coverage to help people with those particular conditions. All SNP plans are required to provide Medicare prescription drug coverage.
Like HMOs, SNP plans often require a referral to see a specialist, and frequently require you to have a primary care doctor. One of the more unusual requirements is that the plan may ask that you have a care coordinator to help you with your healthcare; given the special needs inherent in using an SNP plan, you might already have a care coordinator to help with these issues anyway.
Another important feature of SNP plans to be aware of is that many limit membership to people who require nursing care or are housed in a nursing home.
Am I a Good Candidate for Medicare Advantage?
Medicare Advantage Plans are not designed to be used by everyone who may be eligible for Medicare. It is important to always weigh the advantages and disadvantages of using any particular program, and Medicare Advantage Plans are no exception.
One of the most important aspects to be aware of with any of the Medicare Advantage Plans outlined in the previous section is that all have some kind of network set up under the plan.
The benefit of the network is that the plan has made agreements with the physicians or hospitals in the network to provide services to the members of the plan, which creates stability, and guaranteed service, and other such tangible benefits.
However, attempting to procure medical services outside of the network can cause problems in situations other than emergency or urgent care scenarios. As outlined above, HMO plans may require you to pay the full cost of the medical procedure if it is for my physician outside of the network.
If you like to travel, or are often outside of the area covered by the network of HMO or PPO plans in your area, you may find it very difficult to find positions or healthcare providers that are covered in your network. In this situation, a Medicare Advantage Plan may not be the best choice for you.
On the other hand, if your lifestyle lends itself more to remaining in a single area, or if you suffer from a medical condition that requires a great deal of special assistance and coordination of care, a Medicare Advantage Plan may be your best option. In these situations, the extra benefits afforded by membership in one of these plans and the special assistance of an SNP, may make these plans the best option for you.
Another situation in which membership in a Medicare Advantage Plan may be superior to a traditional Medicare coverage is when you require large numbers of prescription drugs. As stated above, traditional Medicare coverage does not include prescription drug coverage, and many times prescription drugs, particularly for uncommon conditions or ailments, can be extremely expensive or even cost prohibitive.
All this being said, it is obvious that the Medicare system can be very complicated and difficult to navigate. It is important to carefully research the different plans that are available, and to consider what you anticipate needing to use Medicare coverage for in the upcoming years. By carefully weighing the costs and benefits of a Medicare Advantage Plan, you can choose the plan most suited for your together needs.