Medicare Advantage (MA) is also known as Medicare Part C. An MA plan is an alternative to Original fee-for-service Medicare. MA plans are sponsored by Medicare, which pays private insurance companies to provide health services to beneficiaries who enroll in these plans.
In order to join an MA plan, you must be enrolled in both Medicare Part A and Part B, and you must continue to pay the Part B premium ($96.40 in 2009). If you join an MA plan, you are still on Medicare and retain the full rights and protections entitled to all beneficiaries.
You receive all Medicare-covered benefits through the private MA plan you choose. Some MA plans offer Medicare prescription drug coverage (these are known as MA-PD plans), but other plans do not (these are known as MA-only plans). Most MA plans provide extra benefits and charge lower copayments than Original Medicare. However, several MA plans charge the same or more than Original Medicare for certain services. In addition, many MA plans require you to see doctors who belong to the plan and go to certain hospitals to receive services.
On this page, we've compiled information on the 5 types of Medicare Advantage plans:
- Health Maintenance Organizations (HMOs)
- Preferred Provider Organizations (PPOs)
- Private Fee-for-Service (PFFS) Plans
- Special Needs Plans (SNPs)
- Medical Savings Accounts (MSAs)
Note: Some employer-sponsored and retiree plans offer health coverage through MA plans. See Medicare & Other Health Insurance for more information.
1. Health Maintenance Organizations (HMOs)
If you enroll in a Medicare HMO, you will be required to use only doctors and facilities that contract with your particular HMO. You will have a primary care doctor who manages your health care needs. Before you see a specialist in your HMO network (except for an OB-GYN), you must generally get a referral from your primary care doctor. This requirement is waived for emergency care and out-of-the area urgent care. If your current doctors are not under contract with the HMO, you must select new physicians who are part of the HMO network.
If you want to see a doctor outside the plan (known as an out-of-network or non-preferred doctor), and you do not have a pre-approved referral, you cannot use your MA plan card or your Medicare card to pay for those services. You will need to pay for some or all of the costs of your care.
Some HMOs offer a Point-of-Service (POS) option that allows you to see doctors outside the plan's network, often for an additional cost. HMOs that offer this option may also limit when you can use it.
Some HMOs offer Medicare Part D prescription drug coverage and others do not. If you are in an HMO plan that does not offer Part D coverage, you generally cannot get other Part D coverage outside of your plan. See Prescription Drugs for more information.
HMOs are the most popular type of MA plan in California, but they are not available in every part of the state. California's HMO Guide for Seniors (PDF), produced by the University of California, Berkeley, and the State of California Office of the Patient Advocate, is a good resource for learning how managed care plans work. It can also help you understand your rights to get the most out of your plan.
2. Preferred Provider Organizations (PPOs)
Medicare PPOs — like Medicare HMOs — have networks of providers. If you see providers in the network, you will pay a lower copayment than if you go to providers outside the network (these are known as out-of-network or non-preferred). If you go to out-of-network providers, the PPO covers you at a lower rate than normal (i.e., your copayment will be higher). In a PPO, you generally do not need a referral to see a specialist or an out-of-network provider.
In 2009, one regional PPO is available statewide in California, and it offers Medicare prescription drug coverage. This PPO plan has a deductible that must be met before benefit costs are covered, but it does not apply to certain benefits, such as doctor visits and preventive services. There is also an annual limit on out-of-pocket costs. After you have spent the out-of-pocket maximum, the plan pays 100% of all covered services for the remainder of the year.
3. Private Fee-for-Service (PFFS) Plans
Medicare PFFS plans allow you to go to any Medicare-approved doctor or hospital, as long as the terms of your plan's payment are accepted. Before enrolling in a PFFS plan, make sure your doctors and other health care providers accept the plan's terms and conditions for payment. In other words, your providers must agree to bill the plan, not Medicare, for their services. The private company, not Medicare, decides how much it will pay and how much you will pay for the services you receive.
Some PFFS plans offer Medicare prescription drug coverage. If a PFFS plan does not offer prescription drug coverage, you can join a separate Medicare prescription drug plan (PDP). In addition, a PFFS plan may offer extra benefits not covered under Original Medicare, such as additional days in the hospital.
4. Special Needs Plans (SNPs)
Medicare SNPs are designed for certain populations. For example, an SNP may limit its enrollment only to people in certain long-term care facilities (like a nursing home), people who are eligible for both Medicare and Medi-Cal ("dual eligibles"), or people with certain chronic or disabling conditions.
The goal of SNPs is to provide health care and services to those who can benefit the most from the special expertise of the plans' providers and focused care management. All SNPs must provide Medicare prescription drug coverage, and most SNPs offer extra benefits and lower copayments than those in Original Medicare. SNPs are available in some areas of California, but not all.
5. Medical Savings Accounts (MSAs)
Medicare MSAs were available for the first time in California in 2007 and are offered again in 2009. MSAs have 2 parts:
- High-Deductible Health Plan: A plan that covers Medicare Parts A and B services once the high deductible is met.
- Medical Savings Account (MSA): An independent bank account funded by Medicare deposits, which you use to pay for health care services (including meeting the health plan deductible). Note: The amount Medicare deposits into the MSA will not be enough to pay for the entire deductible you must meet before health services are covered.
MSAs are not permitted to offer Part D prescription drug coverage. If MSA members want drug coverage, they must enroll in a separate Medicare prescription drug plan (PDP).
MSAs are available throughout California, except in these 6 counties:
- Glenn
- Inyo
- Lassen
- Los Angeles
- Marin
- Orange
See also:
