Medicare Advantage plan companies contract with Medicare and are paid a fixed amount to provide Medicare benefits. They are generally managed care plans. The most common types are:
HMO – Health Maintenance Organizations
PPO – Preferred Provider Organizations
PFFS – Private Fee for Service plans
MSA – Medical Saving Accounts
There are also Advantage plans that target chronic illnesses. These plans are referred to as SNP, Special Needs Plans, and often will have expanded benefits for various chronic conditions such as, diabetes, chronic pulmonary disease, and heart conditions.
You don’t lose Medicare if you join a Medicare Advantage plan, you replace it. In most cases, you must still pay your Part B monthly premium.
Medicare Advantage plans must include an annual maximum out-of-pocket expense (MOOP) for Part A and B services. These limits differ from company to company and can be as high as $6,700 annually.
Advantage plans must offer the same benefits as Original Medicare but are allowed to charge you more than Original Medicare for benefits like, skilled nursing, home healthcare, and inpatient hospital services. Medicare Advantage plans can also provide additional benefits such as routine vision or dental care.
HMO, PPO and PFFS plans differ in how and where you can get services. The same type of plan with one company may have different rules with another company. Don’t assume one HMO functions like another HMO. Your insurance advisor or the plan directly can explain how each specific company’s coverage works.
Medicare Advantage plans usually charge a monthly premium in addition to the Medicare Part B premium, while some plans have a $0 monthly premium. In either case, be prepared to pay a co-payment whenever you receive a service.
And note, these plans usually offer no coverage when traveling out of your service area unless for a life or death situation.
Advantage plans are generally guaranteed to be issued if you:
- have Medicare Parts A and B; and
- live in the health plan’s service area; and
- do not have End-Stage Renal Disease (ESRD).
There are two types of Advantage plans. Most often, Medicare Advantage plans include a Part D prescription drug plan. These plans are called MAPD’s. There are Advantage plans that do not include part D prescription drug coverage. These plans are called MA plans. Most people who enroll in an MA plan receive their medications from other sources such as the VA or possibly from group coverage.
For more information, refer to the tab on Medicare Prescription Drug Coverage under the Medicare Supplements tab.
Advantage plans are effective January 1 thru December 31st each year.
If you’re satisfied with your plan, you will automatically stay enrolled in that plan until you chose a different plan. If you chose to change your plan, you can do so only during each year’s Annual Enrollment Period. For 2014, the AEP will be from October 15 thru December 7th.
Medicare Advantage plans make adjustments to benefits, costs and coverage each year. Additionally, medical providers change the advantage plans they accept or do not accept each year. Therefore, it is in your best interest to have your trusted insurance advisor during each year’s AEP evaluate how each plan’s benefits relate specifically to your needs and your budget.