How Does Medicare Advantage Work - Mature Health Center

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How Does Medicare Advantage Work?

Today's Medicare is working with private health insurers to provide different ways to get your health care coverage in the Medicare program. These private plans are called Medicare Advantage.

In most cases, Medicare Advantage offers more benefits, and lower co-payments than Original Medicare. Coverage may include Medicare Part D prescription drug coverage as well as hospitalization, doctor visits, skilled nursing, medical tests, diagnostics and other services, including dental and vision benefits, and even free health club memberships.

Medicare Advantage premiums are often low. Depending on where you live, some Medicare Advantage Plans have a $0 premium plan option, and some even reimburse you for part of your Medicare Part B premium. The maximum out-of-pocket expenses you are required to pay are capped at $6,700 per year in 2012 and typically changes each year.

However, with PPO and HMO plans, you may have to see doctors that belong to the plan or go to certain hospitals to get services or risk higher out-of-pocket expenses for going "out-of-network."

Medicare Advantage plans are guaranteed acceptance for all Medicare eligibles every year during the appropriate enrollment period, regardless of health conditions (except End Stage Renal Disease). Dual Eligibles—people on both Medicare and Medicaid—can enroll year-round. Click here to learn more about Medicare Advantage enrollment periods.

To join a Medicare Advantage Plan, you must have Medicare Part A and Part B. You will have to continue to pay your monthly Medicare Part B premium to Medicare. In addition, you might have to pay a monthly premium to your Medicare Advantage Plan for the extra benefits that they offer. If you join a Medicare Advantage Plan, your Medigap (also known as a Medicare Supplement) policy won't work. When you join a Medicare Advantage Plan, you use the health insurance card that you get from the plan for your health care.

How do I get more information and enroll?

Unless you are enrolling in Medicare for the first time, Medicare Advantage enrollments are limited to specific times of year or following specific events (changes in coverage). Click Here to find out if you qualify for any of these enrollment periods.

Medicare Advantage Plans include:

  • Health Maintenance Organizations (HMO)
  • Preferred Provider Organizations (PPO)
  • Private Fee-for-Service (PFFS) Plans
  • Special Needs Plans (SNP)
  • Medical Savings Accounts (MSA)

Medicare HMOs

Medicare HMOs cover the same doctor and hospital services as the original Medicare program, but out-of-pocket costs for these services are usually different. HMOs appeal to some people with Medicare because they may provide additional benefits, such as eyeglasses, which are not covered by the traditional Medicare program. Medicare HMOs may charge a premium that you would need to pay in addition to the Part B monthly premium.

You should be aware that Medicare HMO enrollees generally can only use doctors, hospitals, and other providers in the HMO's network. For an additional fee, some HMOs offer point-of-service (POS) benefits that partially cover care received outside the network.

If you join a Medicare HMO, you will usually have to select a primary care doctor who is responsible for deciding when you should see a specialist and which specialist you should see.

Neither Medicare nor the HMO will pay for unauthorized visits to specialists in the plan, providers outside the HMO's network, or for non-emergency care outside the HMO's service area.

Medicare PPOs

Medicare PPOs, or "Preferred Provider Organizations," are private health plans, much like Medicare HMOs. HMOs and PPOs differ in two key ways:

  1. Medicare PPOs cover some of the costs of your care if you use doctors and hospitals outside the network.
  2. Medicare PPOs generally do not require that you see a primary care physician before going to a specialist.

Regional PPOs became available under Medicare in 2006. These plans are similar to local Medicare PPOs, but serve a larger geographic area (either a single state or multi-state area) and must offer the same premiums, benefits, and cost-sharing requirements to all beneficiaries in the region. Regional Medicare PPOs offer all Medicare benefits, including the prescription drug benefit, but unlike traditional Medicare, these plans have a single deductible for hospital and physician services and an annual out-of-pocket limit on cost sharing for benefits covered under Parts A and B of Medicare. Keep in mind that the out-of-pocket limit will vary depending on the plan you select. As with local PPOs, individuals who sign up for a regional PPO will typically pay more if they go to providers outside of the network.

Private Fee-for-Service (PFFS) Plans

Private fee-for-service plans cover Medicare benefits like doctor and hospital services, much like Medicare HMOs and PPOs. Unlike Medicare HMOs and PPOs, private fee-for-service plans do not have a formal network of doctors and hospitals. Still, not all doctors and hospitals are willing to treat members of a private fee-for-service plan. If considering enrolling in a private fee-for-service plan, make sure your doctor and hospital are willing to accept the private fee-for-service plan’s payments for services before you enroll. Also, be sure you understand a plan’s benefits and cost sharing requirements before you enroll because private fee-for-service plans decide how much enrollees pay for Medicare-covered services and may charge higher cost sharing for certain health care services than the original Medicare program. While private fee-for-service plans are not required to offer the Medicare drug benefit, most do. If you enroll in a private fee-for-service plans without drug coverage, you can also en roll in a Medicare stand-alone prescription drug plan for your drug coverage.

Medicare MSA Plans

A Medicare MSA Plan is a health insurance policy with a high deductible coupled with a Medical Savings Account (MSA). Medicare pays the premium for the Medicare MSA Plan and makes a deposit to the Medicare MSA that you establish. You use the money deposited in your Medicare MSA to pay for medical expenses. If you don't use all the money in your Medicare MSA, next year's deposit will be added to your balance. Money can be withdrawn from a Medicare MSA for non-medical expenses, but that money will be taxed. If you enroll in a Medicare MSA, you must stay in it for a full year.

Special Needs Plans (SNPs)

Special needs plans are private plans that provide Medicare benefits, including drug coverage for beneficiaries with special needs. These include people who are eligible for both Medicare and Medicaid, those living in certain long-term care facilities (like a nursing home), and those with severe chronic or disabling conditions.

For additional information about Medicare Advantage plans, call 1-800-MEDICARE, or get information about Medicare options in your area on the Medicare Personal Plan Finder website,

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